STD Procedure-Evaluation of Proposals For Procurement of Engg Services PDF

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services
STANDARD PROCEDURE
FOR
EVALUATION OF PROPOSALS
FOR
PROCUREMENT OF ENGINEERING SERVICES
(First Edition)
August 31, 2006

March 2009
PAKISTAN ENGINEERING COUNCIL

ISLAMABAD
ACKNOWLEDGMENT
Pakistan Engineering Council extends deep appreciations and acknowledges the tremendous
contribution in developing and finalizing this document by the following members of the
Pakistan Engineering Council (PEC):-
1.
Engr. M. Mazhar-ul Islam

(CEO, Techno Legal Consultants, Lahore)
Convenor
2.
Engr Shehryar Khan

(Joint Technology Adviser, Ministry of Science & Technology)
Member
3.
Engr M Shahid Rafiq

(Chairman, APCA, Islamabad)
Member
4.
Engr Sohail Ahmad Khawaja

(Director (Surveillance), MEPCO,WAPDA, Lahore)
Member
5.
Engr Mahmood Ahmad Sulehri

(Head, Contract Division, NESPAK, Lahore)
Member
6.
Engr Arif Kasam

(Honorary Secretary, ACEP, Karachi)
Member
7.
Engr Ayaz Mirza

(Deputy General Manager, KESC, Karachi)
Member
8.
Engr. Shamshair Dad Khan

(Chief Engineer, WAPDA, Karachi)
Expert
9.
Engr. Ejaz A . Khan

(Partner, NDC, Lahore)
Expert
10.
Engr Tafseer Ahmad Khan

(Director (Electrical), Pakistan Standards & Quality
Control Authority (PSQCA), Karachi)
Expert
11.
Engr Mushtaq Mahmood

(Senior Adviser, ERRA, Islamabad)
Expert
(ii)
PREFACE
Pakistan Engineering Council the Statutory Regulatory body, entrusted to regulate the
engineering profession in Pakistan has undertaken, inter alia, the standardization of country
specific documents to regulate and streamline the procurement of engineering consultancy
services and procurement of works. Standard Procedure for Evaluation of Proposals for
Procurement of Engineering Services is one such document prepared by a team of experts
drawn from the Employers (Client formations), Constructors and Consultants Organization in
Pakistan. The document has been drafted following the international practices such as those
of the World Bank and the Asian Development Bank; the instructions and prevalent practices
in one of the largest client formations having experience of using the services of consultants
i.e. Pakistan Water and Power Development Authority, but conforming to the respective PEC
Bye-Laws. It is expected that use of this document will provide an equitable and just basis for
evaluation of Proposals for procurement of services in line with the international practices
and relevant PEC Bye-Laws.
Pakistan Engineering Council wishes to place on record its deep appreciation for the
tremendous work done by the Standards and Quality Committee and M/s National
Development Consultants (NDC) in finalizing this document. Various engineering
organizations and departments are requested to use this document for procurement of
engineering services.
Any suggestions to improve this document are welcome which may please be addressed to:
Registrar
Pakistan Engineering Council
Ataturk Avenue (East)
Sector G-5/2
Islamabad
Tel # 92-51-2276225
Fax # 92-51-2276224
E-mail: registrar @ pec.org.pk
(iii)
TABLE OF CONTENTS
Page No.
1.0
INTRODUCTION........................................................................................................ 1
1.1
1.2
1.3
1.4
1.5
2.0
General ............................................................................................................... 1
Scope of the Documents .................................................................................... 1
Factors for Evaluation ........................................................................................ 1
Limitations During Negotiations ....................................................................... 2
Applicability of Document ................................................................................ 2
DEFINING SCOPE OF SERVICES AND DRAFTING

THE TERMS OF REFERENCE (TOR) .................................................................. 3
2.1
2.2
Background ........................................................................................................ 3
Terms of Reference ............................................................................................ 3
2.2.4
Outline of the TOR ............................................................................... 4

A.
B.
C.
D.
E.
F.
G.
H.
3.0
ESTIMATE OF CONSULTANTS INPUT AND COST .......................................... 8

3.1
3.2
3.3
3.4
3.5
3.6
3.7
4.0
Background ................................................................................ 4
Objectives .................................................................................. 4
Scope of Services ....................................................................... 4
Expertise Requirement ............................................................... 5
Training and Skills Transfer ...................................................... 6
Institutional Arrangement .......................................................... 6
Reporting/Approval of Reports.................................................. 6
Client Provided Data, Services, Personnel
and Facilities .............................................................................. 7
General ............................................................................................................... 8
Cost Elements .................................................................................................... 8
Salary Costs ...................................................................................................... 8
Social Charges ................................................................................................... 9
Overhead and Fee on Salary Costs ................................................................... 9
Estimation of Staff Time Inputs....................................................................... 11
Direct (Non-Salary) Costs................................................................................ 12
LETTER OF INVITATION - INVITATION DOCUMENTATION ................... 18

4.1
4.2
4.3
Letter of Invitation ........................................................................................... 18

Information to Consultants .............................................................................. 18
Changes in LOI ................................................................................................ 18
(iv)

Sample Letter of Invitation (LOI) ................................................................ 19
1.
2.
3.
4.
5.
6.
7.
8.
Introduction .......................................................................................... 19
Documents ........................................................................................... 20
Preparation of Proposal ........................................................................ 20
Submission of Proposals ...................................................................... 23
Proposal Evaluation ............................................................................. 23
Negotiation ........................................................................................... 24
Award of Contract................................................................................ 25
Confirmation of Receipt ...................................................................... 25
LOI DATA SHEET.................................................................................................... 26

STANDARD FORMS ................................................................................................ 31
APPENDIX-I: TECHNICAL PROPOSAL FORMS ............................................. 32
Form 1 Firms Reference ............................................................................................. 33
Form 2 Present Staff Deployment................................................................................ 34
Form 3 Approach Paper on Methodology Proposed for Performing the Assignment . 35
Form 4 Comments/Suggestions of Consultants ........................................................... 36
Form 5 Format of CV for Proposed Key Staff ............................................................ 37
Form 6 Work Plan/Activity Schedule .......................................................................... 39
Form 7 Completion and Submission of Reports .......................................................... 39
Form 8 Work Plan and Time Schedule for Key Personnel .......................................... 40
Form 9 Composition of the Team (Personnel) and the Tasks to be Assigned to Each
Team Member ..................................................................................................... 41
APPENDIX-II: FINANCIAL PROPOSAL FORMS ............................................. 42
Form 1 Breakdown of Rates for Consultancy Contract ............................................... 43
Form 2 Breakdown of Social Charges ......................................................................... 44
Form 3 Breakdown of Overhead Costs ........................................................................ 45
Form 4 Estimated Local Currency Salary Costs/Remuneration .................................. 46
Form 5 Direct (Non-Salary) Costs ............................................................................... 48
Form 6 Summary of Cost of Consultants Services..................................................... 50
5.0
EVALUATION OF PROPOSALS ........................................................................... 51

5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
Principles for Selection ................................................................................... 51

Evaluation Criteria .......................................................................................... 51
How to Proceed ................................................................................................ 52
Qualification/Experience of Firms ................................................................... 54
Approach and Methodology ............................................................................ 58
Evaluation of Key Staff ................................................................................... 60
Evaluation ........................................................................................................ 66
Review by Committee and Selection ............................................................... 69
Evaluation of Price and Final Ranking of Proposals ....................................... 70
(v)

6.0
NEGOTIATION OF CONSULTANTS CONTRACT.......................................... 73

6.1
6.2
6.3
6.4
6.5
Introduction ...................................................................................................... 73
Standard Forms for Consultants Contract ...................................................... 74
Time Based/Cost Plus (Fixed Fee) Contracts .................................................. 75
Lump-sum Fee Contracts ................................................................................. 76
Preparing for Negotiations ............................................................................... 77
(vi)
1.0 INTRODUCTION
1.1
General
The basic and prime aim of this document is good practice in the employment of
consultants. The document though titled as Procedure for Evaluation of Proposals for
Procurement of Engineering Services, yet it includes procedure and instructions for all
those activities which lead to the proposal evaluation activity. Accordingly it offers
assistance to users of Consultants Services in the following areas, covered under
separate sections. It includes:Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
1.2
Defining Scope of Consultants Services and Drafting the Terms of

Reference.
Estimation of Consultants Input and Costs
Letter of Invitation/Invitation Documentation
Evaluation of Proposals
Negotiation of Consultants Contract.
Scope of the Document

This document contains procedure which appropriately fulfil the provision of open
and fair competition as it does for maintaining the entire selection process transparent.
The document also covers the aspect of fruitful utilization of the Clients spare staff
and resources, which encourages technology transfer and import practical experience
through on-job-training to Clients experience starved staff in the prevailing
environment.
In the absence of pre-laid down rules/procedures for use of proportions of quality and
cost factors, the staff associated with selection of consultants is likely to use the
contents of this sub-para in a widely varied and at times irrational manner treating this
procurement also as if it is bidding for goods or works and indulging even in haggling
for price reductions. This document covers this aspect on the global lines; requires the
client formations to lay down the details of criteria for selection, that is, weightages
for Quality and Cost; minimum Quality qualifying threshold score and nonnegotiation of the cost element, where it has already figured in the final ranking of the
proposals/consulting firms. This aspect has been adequately covered in this document
so that the selection is made in a transparent and equitable manner. It will also restrict
the use of personal discretion by the selection committee/its members.
1.3
Factors For Evaluation

In order to adequately cover the relevant factors for evaluation of the technical
proposals and the detailed procedure for application of these factors, the relevant
weightages to be assigned to these factors, shall inter alia include the following:
(a)
The consultants competence and experience relevant to the assignment;
(1)
(b)
Quality of approach and methodology to include understanding of project needs,

methodology to implement/perform the activities/sub-activities, work plan,
organization of the Team, time schedules, the consultants proposal for
implementation of the assignment etc; and
(c)
Qualifications and experience of the proposed personnel.
It is required to provide and define how the selection committee constituted for
evaluation of proposals will apply and use these factors for relative ranking of the
qualifications of the firms submitting the proposals. Also different assignments have
different requirements and so different importance is to be assigned to each of the
three afore-given factors. Further break-ups of these three heads have also been not
listed for consideration by the proposal evaluation committee. This document
appropriately and adequately covers these aspects in detail and provides a
system/process containing necessary guidance and options to the selection committee.
1.4
Limitations During Negotiations

These Procedure also list down the limitations of the relationship to be observed
during negotiations of the consultants contract.
1.5
Applicability of Document
As explained in the foregoing, this document is intended to provide a complete
guidance for the departments in government, semi-autonomous, autonomous and
private sector users of services, preparing to engage Engineering Consultants for all
types of projects.
(2)

2.0
2.1
DEFINING SCOPE OF SERVICES AND DRAFTING THE

TERMS OF REFERENCE (TOR)
BACKGROUND
Prior to proceeding with defining the scope of services for the Consultants and
finalization of the Terms of Reference (TOR) an analysis and decision on the
objectives and general scale of desired services is almost a necessity. The first and
most important step for finalization of scope and drafting of the Terms of Reference is
constitution of a committee which should have representation on the basis of its
nominees having thorough familiarity with the project and its setting, adequate level
of competence in the principal disciplines of the requisite services, previous
experience in the actual direction or execution of similar services and a thorough
knowledge of the PEC Bye-Laws. Accordingly the department may assign this basic
but extremely important duty to professionals who are experienced, mature with
similar exposure and representing the same or similar disciplines as those required for
the consultants team. These members should have, in addition to the afore-given,
knowledge of the major problems to be tackled by the consultants, a realistic grasp of
the project situation, an understanding of the staff disciplines, staff time and cost
implications of the components of the services to be procured for the specific project.
These committee members may also be capable to consider a range of options in
study design with the overall framework of the service configuration, because there
are likely to be alternatives available for packaging the services of consultants, of
combining counterpart staff effort by the implementing agency with Consultants time
inputs under a specific arrangement to obtain the most effective and economical
service contract.
2.2
TERMS OF REFERENCE
2.2.1 The TOR are the clients detailed description of services required for carrying
out an assignment which is also necessary to enable the consultants prepare and
submit their proposals for the assignment. Reference to some previous TOR
used for a similar project is also helpful. However, in the light of contents of
para 2.1 above, it should not be difficult to gather a team of professionals with
capacity to conceive and deliver the requisite TOR, drawn specifically for the
project. They should merely be able to carry out a mental simulation of the
activities/events involved in the project and don the hat of the Team Leader of
the consultants team to visualize the requisites.
2.2.2 In case the Implementing Agency (IA) considers that it is short of expertise to
draft and finalize the TOR and other portions of the Invitation Document, they
may seek outside assistance. However the agency employed for such assistance
will not be eligible to compete for securing the assignment because of the
conflict of interest.
2.2.3 Careful, clear, concise and complete TOR preparation cannot be over
emphasized because this document is valid and referable right from the
inception to completion, final acceptance of services and, throughout the
currency of the Consultants Contract. The TOR is important because it is a tool
for:(3)
Forging an agreement between all partners in project implementation on the

objectives and scope of Consultants Services;
Advising the short-listed consultants about the scope of work to finalize a
meaningful proposal; and
Defining The Services in the contract to be negotiated/finalized with the
selected firm.
2.2.4 OUTLINE OF THE TOR.

The Terms of Reference necessarily cover the following:
A.
BACKGROUND
This section should concisely describe the general background of the

assignment attending to the following questions:
Why this assignment?

For whom this assignment required?
Its role in the project.
Project history and location.
Project description/scope of work including its components stating
their quantum/size.
Implementation schedule/contract period.
Types of activities to be completed.
Identification of supervisors of Consultants work.
Issues to be resolved.
Source of financing/Project cost/status of financing.
B.
OBJECTIVES
This section should clearly define what results are expected from this
assignment, so clear that even a layman should be able to follow and
understand without any help or guidance. It could be:
C.
Determination of Project Feasibility.

Preparation of development programmes.
Design of structures and finalization of procurement documentation.
Construction and completion of a project with definite benefits.
Design of training program and providing training/technology
transfer.
SCOPE OF SERVICES
This section shall cover the professional services required from the consultants
including disciplines, quantum of inputs, methodology to achieve the aforementioned objectives. It is desirable that the IA may list the expected tasks
forming part of the services but there should not be finality in the tasks listed
to leave the options for the consultant open to decide their own course of
(4)

action to the best of their judgement to complete the assignment and achieve
the listed objectives. Accordingly the scope of services should, inter-alia,
briefly describe the following:
Tasks to be carried out.

Phasing of tasks / assignments.
Institutional arrangements and consultants relationship with IA/
others.
Detailed description of each task and in specific sequence which can
include:
-
Collection of previous data/documentation.

Study, review and analysis of previous data.
Recommendations for additional surveys, investigations &
data.
Environmental Impact Assessment (EIA) and socio-economic
studies.
Survey and investigations.
Design of the project and project components / structures.
Procurement issues / award of contracts
Construction supervision and contract management.
Monitoring and evaluation.
Reporting requirements such as inception, periodic progress,
and completion reports etc.
O & M manuals.
O & M performance contracts.
Any other requirement which may vary with various project
types.
Data and documentation already available with the client.
However the client may include only the tasks and its detailed description
short of the methodology and procedures to be adopted by the consultants for
implementation of the assignment. It is so because the client may have insight
into the methodology but he may not be having access to latest techniques /
technologies on the one hand, and may on the other hand deprive himself of
the opportunity to judge the proficiency of consultants while consultants
proposal is evaluated on the basis of understanding of objectives and quality of
methodology required to be proposed by them. Any differences in perceptions
are discussed at the time of negotiation of consultants contract.
D.
EXPERTISE REQUIREMENT
The TOR should also lay down the requirements for the following:
Team responsibilities requirements.

Approximate time durations for each function and position.
Qualifications, skills and experience of the consultants staff.
Scoring weightages for elements of technical proposals.
(5)
E.
Association/Joint Venture arrangements issues coverage.

Minimum technological or institutional experience.
TRAINING AND SKILLS TRANSFER

Training of the IA personnel or transfer of skill to counterpart staff of the
client or the staff seconded/deputed to work with consultants as their line staff
could form part of the consultants TOR if deemed necessary by the client. It
must be properly stated because there is difference in its scope under specific
arrangements such as, on the job training, training through institutes or
universities or direct training as a specific assignment, where consultants shall
be required to develop curricula and provide specialized trainer personnel
along with training equipment.
F.
INSTITUTIONAL ARRANGEMENTS
The TOR must clearly state the institutional arrangement and role(s) of client
staff in the consultants assignment. It may include the following elements:
G.
The institutional set-up/Project Management Organization.

Who will supervise consultants work?
Status/arrangement of clients staff deputed to work with consultants.
Consultants responsibility for successful completion of assignment.
Arrangement for selection of staff and mode of handling unsuitable
client staff.
REPORTING/APPROVAL OF REPORTS
This section should explicitly set out the time schedule of services, scope and
frequency of reporting requirements and number of copies of each report, the
purpose, distribution, procedures and schedules for review and approval of
each report. Accordingly it is desirable that the total time for implementation
of the project is specifically stated; phasing of the assignment is given in the
form of activities schedule and depicted in bar charts and flow diagrams.
Usually following types of reports are required from the consultants:-
Periodic Progress Reports: These should include but may not be

limited only to Monthly, Quarterly and Annual Reports. Time periods,
formats, essential contents and problems plaguing the progress/ the
bottlenecks, if any may form part of the reports.
Inception Report: The consultants may be required to submit these

reports on long term assignments after elapsing of an agreed period of
six to sixteen weeks from the date of issuance of letter to proceed/
mobilize, but preferably around 8-10 weeks. These reports normally
list inconsistencies in the TOR, problems related to staffing, access to
place of work and clients assistance, status of mobilization by the
consultants and any major findings by the consultants during this
phase. The inception reports also provide detailed work programmes
for activities/sub-activities and the schedule of expected staff
(6)

mobilizations.
H.
Interim Reports: In case of a phased assignment, the consultants shall

be required to submit reports for each phase such as feasibility,
detailed design, tendering /award etc. These reports are necessarily
reviewed by the client and cleared prior to its finalization and
proceeding with the next phase.
Final Report:The consultants are normally asked to provide a draft

final completion report for review/clearance by the client for its final
printing in an agreed number of copies. These reports are required to
include detailed description of the project, project components, details
of data, contracts, costs, organizational details of the participants,
calculations, photographs, sketches, as-built drawings, computer
diskettes and software programmes used/ generated during
implementation of the project.
CLIENT PROVIDED DATA, SERVICES, PERSONNEL AND
FACILITIES.
The consultants financial proposal is a function of client provided facilities

and technical/non-technical staff. The TOR should list down the
data/documentation for a realistic evaluation of the work and the status,
number of technical, professional, sub-professionals and support staff to be
provided by the client and status of their availability, their qualification
requirements and conditions of employment to work with the consultants, their
training requirements and time and budget allowance to be made for such staff
and their training as well as the facilities which include office space/housing
and furnishings, office equipment, transport, communication facilities, logistic
support and other items complementary for setting up and maintaining the
office and living accommodation.
(7)
3.0
3.1
ESTIMATE OF CONSULTANTS INPUT AND COST
General
Estimate of consultants inputs and costs for the assignment is a concurrent process
with activities outlined under the section - Defining Scope of Consultants Services
and Drafting of the TOR since a number of elements from there are utilized in the
cost estimation process also. However it is emphasized once again that the teams
involved in setting the budget and schedules/time frames for the services must be
knowledgeable and have clear understanding of the overall process of how consulting
firm(s) perform their services and what are their essential inputs to complete the
assignment in an organized, systematic, effective and cost effective manner.
3.2
Cost Elements
Irrespective of all the differences in size, length, type and nature of consultants
assignments it is possible to prepare cost estimates by adopting a procedure which
focusses on its elements/sub elements. For the sake of guidance, for a general
engineering consultancy assignment, these can be listed as follows:
3.3
Salary costs for Professional/Semi-professional staff employed on the

assignment including social costs.
Consultants Overhead costs and Profit (Fee) on salary costs.
Consultants Direct (Non-salary) costs for the assignment.
Salary Costs
PEC Bye-Laws list down elements (reproduced as follows) forming part of the salary
costs. In international practice, these elements form part of two separate categories of
costs i.e. Basic Salary (including allowances) and Social Charges.
(i)
Pay, Technical Pay, Charge pay or allowance.
(ii)
Pay during vacation/earned leave salary.
(iii)
Pay during holidays.
(iv)
Dearness allowances/local compensatory allowances.
(v)
Conveyance allowance or conveyance facility.
(vi)
House rent allowance or free house, furnished or un-furnished including

telephone facility.
(vii)
House maintenance allowance, pay of chowkidar, mali, etc.
(viii)
Free electricity, gas & water.
(ix)
Entertainment allowance.
(x)
Medical expenses/allowance.
(xi)
Government levies e.g., old age benefit contribution, as payable to EOBI and
Education Cess etc.
(8)
3.4
(xii)
Provident fund and gratuity (consulting engineers contribution).
(xiii)
Group Insurance premia.
(xiv)
Leave fare assistance.
(xv)
Any other special allowances or benefits, actually paid or payable to an

employee and mutually agreed between consulting engineer and the client and
required as per any labour or other laws in force.
Social Charges
However, all these costs are not payable to the professional staff. Some of these
elements which are listed below are payable to or on behalf of the expert, in the light
of the Governments legislation, social security and company rules which are called
social costs/social charges. These elements are listed as follows:-
3.5
(i)
Pay during vacation/earned leave salary.
(ii)
Pay during holidays.
(iii)
Medical expenses/allowance.
(iv)
Government levies e.g., old age benefit contribution, as payable to Employees

Old Age Benefit Institution (EOBI) and Education Cess etc.
(v)
Provident fund and gratuity (consulting engineers contribution).
(vi)
Group Insurance premia.
(vii)
Leave fare assistance.
(viii)
Any other special allowances or benefits, actually paid or payable to an

employee and mutually agreed between consulting engineer and the client and
required as per any labour or other laws in force.
Overhead and Fee on Salary Costs

3.5.1 The second cost item under the PEC Bye-laws is the overheads and fee
chargeable on the salary costs i.e. salary plus social charges. The overhead
costs are expenditures being incurred by the Consulting Firms for running
their business but are not directly chargeable to any revenue earning
assignment. PEC Bye-laws include these costs under the following heads
which are reproduced below:(i)
Provisions for office space including light, heat, air-conditioning and similar
items for working space, depreciation and amortization allowances or rental
for furniture, drafting equipment and engineering instruments, office and
drafting supplies and office transport including operation and maintenance,
local phone calls, local transport and all such costs not identifiable to specific
projects.
(ii)
Taxes and insurances other than those included as salary costs, including
property tax on premises, social securities, group insurance, medical cover,
(9)

professional liability insurance cover, if any, in accordance with the relevant
Bye-Laws.
(iii)
Library and periodical expenses, and other means of keeping abreast of

advances in engineering, such as attendance at technical and professional
meetings/seminars and staff training costs, membership costs of professional
bodies and similar expenses.
(iv)
Executive, administrative, accounting, legal, stenographic and clerical salaries

(unproductive non-technical salary costs) and expenses other than identifiable
salaries included in Salary Costs and expenses included in reimbursable Non
Salary Costs.
(v)
Salaries or imputed salaries of partners and principals, to the extent that they
perform general executive and administrative services as distinguished from
technical or advisory services directly applicable to particular projects. These
services and expenses, essential to the conduct of the business, include
preliminary arrangements for new projects or assignments.
(vi)
Bank interest (or profit payable on Islamic Banking System) on borrowed

capital.
(vii)
Business development expenses, including salaries of principals and

promotional and salary costs of employees so engaged; and any costs during
pre-qualification and pre-agreement stages of the project.
(viii)
Entertainment expenses.
(ix)
Provision for loss of productive time of technical employees between

assignments, and for the time of principal and employees on public interest
assignments.
(x)
Non identifiable communication expenses.
(xi)
Staff recruiting and lay off costs.
(xii)
Any other items normally included as part of overhead costs according to

generally accepted practices of consulting engineers.
3.5.2 The overheads are charged as a percentage of the salary costs. The percentage
overhead figure is taken from the commercial auditors report based on the
expenditures during the previous year(s). This means that total non-chargeable
cost for running the company is divided by the salary costs from all the
assignments for the same year multiplied by 100. The overhead percentage
based on PEC definition of salary usually should be between 60 to 100
percent. The items of cost included in the overheads is given under para 3.5.1.
3.5.3. The element of Fee, in the Time Based (Cost plus Fee) Contracts is the
consultants gross profit before taxes (and any bonuses payable to the
employees of the Firm) is a figure varying between 5 to 20 percent of the
(10)

salary cost plus overheads. In fact the costs chargeable by consultants from
their clients for a specified time period, say a month, is called Billing Rate for
the individual. The Billing Rates are computed as Follows:Items Description
Units
a-
Salary cost (including Social

costs) payable to or for the Individual.
100
b-
Overheads (say 90 % of a)
90
c-
Salary cost + Overhead cost
190
d-
Fee (say @ 12% of c)
e-
Billing rate (c+d)
22.80
212.80
The monthly billing rates for local consultants for Junior and specialist positions
range between Rs. 35,000 and Rs. 150,000 respectively as prevalent in the year 2000.
For the purpose of estimation, an average rate could be utilized which could be an
average varying between Rs. 60-80 thousand per mansem for local consultants for
various mix of consultants Key Staff inputs i.e. higher rate where input of senior
professionals (specialist positions) is higher with relation to the junior professionals.
3.6
Estimation of Staff Time Inputs

3.6.1
Activity Schedule
Computation of cost estimate for the consultants time inputs is a

function of the total time required for the entire team (of the
professional/semi-professional staff to complete the assignment in the
envisioned manner) and the billing rates computed for each staff member. The
computation of billing rate in itself is a function of salary plus allowances,
consultants overheads and the fee as explained under sub-paras 3.3 through
3.5. The estimation of time for each staff member and the total time is a rather
complex process requiring a mental simulation by the committee/committee
members drafting the TOR after defining the scope of services. After that it
would list down the activities/sub-activities forming part of the project
implementation schedule; a realistic and reasonable time period for
completion of each activity; relationship of each activity with other activities,
if any and finally, finalization of an activity schedule in the form of a barchart. A typical example of an activity schedule in the form of a bar-chart for a
composite irrigation and drainage project is given on the pages 13 and 14 .
The project in this example requires the services of consultants for the listed
activities which comprise of planning, design and construction of a new canal,
distribution network of distributary, minor canals/water courses, a composite
surface/ sub-surface drainage system and commissioning of the project.
(11)

3.6.2. Staff Schedule
The second phase in the process is organization of a team of
Specialists/Junior professionals to handle the activities listed above and their
co-relation with each activity. A Staffing Schedule in the form of a bar-chart
provided on pages 15 and 16 has been drawn and placed as an example. The
consultants total professional staff time inputs are computed accordingly.
This may only be taken as an example since some supporting staffs services
(such as Quantity Surveyors/Cost Estimators, Economists, Sociologist,
Environmentalists, Administrative staff, Drafting staff etc.) are not included in
the staffing schedule and may be included according to the specific
requirements of the project.
Use of Client Staff
The engineering departments of some of the client organizations
maintain their own technical staff, some of which could be available for
performing services on the roll of the consultants. This deployment of client
staff on secondment/deputation is not only a cost saving measure but is also
helpful in training of the clients staff in the finer, and modern aspects of
project implementation which could be considered for utilization of their
services especially for transfer of technology.
3.7
Direct (Non-Salary) Costs

3.7.1
Cost Components
The relevant PEC Bye-Laws list the heads of costs which are directly
allocable to specific engagements and projects for performing the assignment.
These are incurred under the following heads:(i)
Provisions for office, light, heat and similar items for working space, costs or
rental for furniture, drafting equipment and engineering instruments and
automobile expenses identifiable to specific projects for which special
facilities other than head office of the firm are arranged.
(ii)
Provision for labour or work charge establishment.
(12)
Work-Plan
(13)
Work-Plan
(14)
Work-Plan
(15)
Work-Plan
(16)
(iii)
Daily and travelling allowances/expenses of employees, partners and

principals when away from home office on business connected with the
project.
(iv)
Identifiable communication expenses, such as long distance telephone,

telegraph, cable, telex, express charges, and postage other than general
correspondence.
(v)
Services directly applicable to the project, such as special legal and accounting
expenses, computer rental and programming costs, special consultants,
borings, laboratory charges, perspectives, renderings, photos, model costs,
commercial printing and binding and similar cost which are not applicable to
the overhead costs, professional liability insurance cover.
(vi)
Identifiable drafting supplies and office supplies and expenses charged to the
employers work, as distinguished from such supplies and expenses applicable
to several projects.
(vii)
Identifiable reproduction costs applicable to the work such as blue printing,

photostating, mimeographing, printing, binding etc.
These expenses which seldom can be determined in advance with any degree
of accuracy, are reimbursed by the employer at actual invoice cost, plus a
service charge.
3.7.2
Contingencies
Computation of costs under the afore-given heads is a process

involving the known yardsticks as experienced in the past and there is always
chances of it to vary with the actual costs incurred over the period of the
consultants assignment. However, reference to the latest similar contract could
give a good yardstick with appropriate additions under the head physical and
price contingencies. The physical contingencies may vary to the extent of 10
to 15 percent of the estimated cost depending upon the uncertainties of the
estimates and the rates of inflation. However, in estimating costs for
assignments lasting less than one year, no allowance should normally be
made for price escalation during its implementation to be provided under the
sub-head price contingencies.
(17)

4.0
4.1
LETTER
OF
DOCUMENTATION
INVITATION-INVITATION
Letter of Invitation
The Client, after publicly notifying the scope of work of a project and completing the
prequalification (short-listing) process from the eligible consulting firms (registered
with PEC), will invite proposals from these short-listed firms through formally issuing
them a Letter of Invitation (LOI) including the Data Sheet also called a Request for
Proposal (RFP) alongwith its attachments, which are listed as follows:
4.2
Terms of Reference/Background Information

Sample formats for:Technical Proposal
Financial Proposal
Draft Form of Contract
Information To Consultants
Background information which is also termed as Information to Consultants (ITC)
is a document which provides information/instructions necessary for the consultants
to prepare their proposals in an informed and responsive manner and forms part of the
LOI Data Sheet. It includes information which is not entirely covered under the TOR.
It includes also the documents and other material necessary for preparation of a
proposal. A sample format for the Letter of Invitation and Appendix-I comprising
Forms 1 to 9 and Appendix-II comprising 1 to 6 Forms is provided on pages 32 to 40
and pages 42 to 50 respectively which should serve as a guide for the consultants
selection committee to finalize the RFP.
4.3
Changes in LOI
It may please be noted that except for filling in the blanks, the clients staff is not
required to change anything in the Sample Letter of Invitation. Any
changes/amendments, if it is essential, has to be made through the Data Sheet.
(18)

SAMPLE LETTER OF INVITATION (LOI)
Dear [ name of Consultants)
Re: Proposal for Consulting Services, Letter of Invitation
1.
INTRODUCTION
1.1
You are hereby invited to submit a technical and a financial proposal for consulting
services required for the Assignment named in the attached LOI Data Sheet (referred
to as Data Sheet hereafter) annexed with this letter. Your proposal could form the
basis for future negotiations and ultimately a contract between your firm and the
Client named in the Data Sheet.
1.2
A brief description of the Assignment and its objectives are given in the Data Sheet.
Details are provided in the attached TOR.
1.3
The Assignment shall be implemented in accordance with the phasing indicated in the
Data Sheet. (When the Assignment includes several phases, continuation of services
for the next phase shall be subject to satisfactory performance of the previous phase,
as determined by the Client).
1.4
The Client (provide name of the organization) has been entrusted the duty to
implement the Project as Executing Agency by the (name the respective government
i.e. GOP, GO Province etc.) and funds for the project for the phase have been
approved and provided in the budget (to be specified as the case may be) for
utilization towards the cost of the Assignment, and the Client intends to apply part of
the funds to eligible payments under the contract for which this LOI is issued.
1.5
To obtain first-hand information on the Assignment and on the local conditions, you
are encouraged to pay a visit to the Client before submitting a proposal and attend a
pre-proposal conference if specified in the Data Sheet. Your representative shall meet
the officials named in the Data Sheet. Please ensure that these officials are advised of
the visit in advance to allow adequate time for them to make appropriate
arrangements. You must fully inform yourself of local conditions and take them into
account in preparing your proposal.
1.6
The Client shall provide the inputs specified in the Data Sheet, assist the Consultants
in obtaining licenses and permits needed to carry out the services, and make available
relevant project data and reports.
1.7
Please note that:

i)
The cost of preparing the proposal and of negotiating the contract,
including a visit to the Client, are not reimbursable as a direct cost of the
Assignment; and
ii)
The Client is not bound to accept any of the proposals submitted.
1.8
An invitation to submit proposals has been sent to the firms as listed/stated in the Data
Sheet.
(19)

1.9
We wish to remind you that in order to avoid conflicts of interest:

i)
Any firm providing goods, works, or services with which you are
affiliated or associated is not eligible to participate in bidding for any goods,
works, or services (other than the Services and any continuation thereof)
resulting from or associated with the project of which this Assignment forms a
part; and
ii)
Any previous or ongoing participation in relation with the project by
your firm, its professional staff, its affiliates or associates under a contract may
result in rejection of your proposal. You should clarify your situation in that
respect with the Client before preparing the proposal.
2.
DOCUMENTS
2.1
To prepare a proposal, please use the attached Forms/Documents listed in the Data
Sheet.
2.2
Consultants requiring a clarification of the Documents must notify the Client, in

writing, not later than Twenty one (21) days before the proposal submission date. Any
request for clarification in writing, or by cable, telex or telefax shall be sent to the
Clients address indicated in the Data Sheet. The Client shall respond by cable, telex
or telefax to such requests and copies of the response shall be sent to all invited
Consultants.
2.3
At any time before the submission of proposals, the Client may, for any reason,
whether at its own initiative or in response to a clarification requested by an invited
consulting firm, modify the Documents by amendment. The amendment shall be sent
in writing or by cable, telex or telefax to all invited consulting firms and will be
binding on them. The Client may at its discretion extend the deadline for the
submission of proposals.
3.
3.1
PREPARATION OF PROPOSAL
You are requested to submit a technical and a financial proposal. Your proposal shall
be written in English language.
Technical Proposal
3.2
In preparing the technical proposal, you are expected to examine all terms and
instructions included in the Documents. Failure to provide all requested information
shall be at your own risk and may result in rejection of your proposal.
3.3
During preparation of the technical proposal, you must give particular attention to the
following:
i)
If you consider that your firm does not have all the expertise for the
Assignment you may obtain a full range of expertise by associating with other
firms or entities. You may also utilize the services of expatriate experts but
only to the extent for which the requisite expertise is not available in any
(20)

Pakistani Firm. You may not associate with the other firms invited for this
Assignment unless specified in the Data Sheet.
ii)
Subcontracting part of the Assignment to other consultants if
considered desirable; the same sub-consultant may be included in several
proposals, subject to limitations in the Data Sheet.
iii)
The estimated number of key professional staff-months required for
the Assignment is stated in the Data Sheet. Your proposal should be based on
a number of key professional staff-months substantially in accordance with the
above number. However you may propose changes in the light of your
experience through your comments on the TOR.
iv)
The key professional staff proposed shall be permanent employees of
the firm unless otherwise indicated in the Data Sheet.
v)
Proposed staff should have experience preferably under conditions
similar to those prevailing in the area of the Assignment. The minimum
required experience of proposed key staff shall be as listed in the Data Sheet.
vi)
No alternative to key professional staff may be proposed, and only one
curriculum vitae (CV) may be submitted for each position.
vii)
Study reports must be in the English Language. Working knowledge of
the national language by the firms personnel is recommended. The
knowledge of the regional language where the Assignment is located will be
considered additional qualification.
3.4
Your technical proposal shall provide the following and any additional information,
using the formats attached in Appendix 1:
I-From-1
A brief description of the Consultants organization and an outline of

recent (not older than Ten years) experience on assignments of a
similar nature. For each assignment, the outline should indicate, inter
alia, the profiles of the staff provided, duration, contract amount and
firms involvement.
I-Form-2
A list of projects presently being under taken by the Firm and

expertise-wise total number and number of staff deployed on the
projects being presently under-taken.
I-Form-3
Consultants understanding of the objectives of the project, their

approach towards the assignment and a description of methodology
that the consultants propose to perform on the activities and
completion of the assignment.
(21)
3.5
I-Form-4
Any comments or suggestions on the TOR;

The Consultants comments, if any, on the data, services and facilities
to be provided by the Client and indicated in the TOR.
I-Form-5
CVs recently signed by the proposed key professional staff or an

authorized manager in the consultants head office. Key information
should include number of years with the firm, and degree of
responsibility held in various assignments especially during the last ten
(10) years.
I-Form-6
A monthly work plan, illustrated with a bar chart of activities and

graphics of the critical path method (CPM) or Project Evaluation
Review Techniques (PERT) type.
I-Form-7
A schedule for compilation and submission of various types of reports.
I-Form-8
A work plan and time schedule for the key personnel also showing the
total number of person-months by each key person.
I-Form-9
The composition of the proposed staff team, the tasks which would be
assigned to each staff members and their positions.
10.
If the Data Sheet specifies training as a major component of the

Assignment, a detailed description of the proposed methodology,
staffing, budget and monitoring.
11.
Any additional information as requested in the Data Sheet.
The technical proposal shall not include any financial information. The Consultants
comments, if any, on the data, services and facilities to be provided by the Client and
indicated in the TOR shall be included in the technical proposal.
Financial Proposal
3.6
The financial proposal should list the costs associated with the Assignment. These
normally cover remuneration for staff in the field and at headquarters, per diem,
housing, transportation for mobilization and demobilization, services and equipment
(vehicles, office equipment furniture and supplies), printing of documents, surveys
and investigations. These costs should be broken into foreign (if applicable) and local
costs. Your financial proposal should be prepared using the formats attached as
Appendix 2 i.e. Form Nos. 1 through 6.
3.7
The financial proposal shall also take into account the professional liability as
provided under the relevant PEC Bye-Laws and cost of insurances specified in the
Data Sheet.
3.8
Costs may be expressed in currency(ies) listed in the Data Sheet
(22)

4.
SUBMISSION OF PROPOSALS
4.1
You shall submit one original technical proposal and one original financial proposal
and the number of copies of each indicated in the Data Sheet. Each proposal shall be
in a separate envelope indicating original or copy, as appropriate. All technical
proposals shall be placed in an envelope clearly marked Technical Proposal and the
financial proposals in the one marked Financial Proposal. These two envelops, in
turn, shall be sealed in an outer envelop bearing the address and information indicated
in the Data Sheet. The envelope shall be clearly marked, DO NOT OPEN, EXCEPT
IN PRESENCE OF THE EVALUATION COMMITTEE.
4.2
In the event of any discrepancy between the copies of the proposal, the original shall
govern. The original and each copy of the technical and financial proposals shall be
prepared in indelible ink and shall be signed by the authorized Consultants
representative. The representatives authorization shall be confirmed by a written
power of attorney accompanying the proposals. All pages of the technical and
financial proposals shall be initialed by the person or persons signing the proposal.
4.3
The proposal shall contain no interlineation or overwriting except as necessary to

correct errors made by the Consultants themselves. Any such corrections shall be
initialed by the person or persons signing the proposal.
4.4
The completed technical and financial proposals shall be delivered on or before the
time and date stated in the Data Sheet.
4.5
The proposals shall be valid for the number of days stated in the Data Sheet from the
date of its submission. During this period, you shall keep available the professional
staff proposed for the assignment. The Client shall make its best effort to complete
negotiations at the location stated in the Data Sheet within this period.
5.
PROPOSAL EVALUATION
5.1
A two-envelope procedure shall be adopted in ranking of the proposals. The technical

evaluation shall be carried out first, followed by the financial evaluation. Firms shall
be ranked using a combined technical/financial score,1 as indicated below:
Technical Proposal
5.2
The evaluation committee appointed by the Client shall carry out its evaluation,
applying the evaluation criteria and point system specified in the Data Sheet. Each
responsive proposal shall be attributed a technical score (St). Firms scoring less than
seventy (70) percent points shall be rejected and their financial proposals returned unopened.
_________________________________________________________________________
1:[Note: The client has to decide, based upon the complexity of the project, what weightages are to be assigned to
technical and financial components for evaluation/ranking of proposals which may vary between 80:20 to 100:0
for the technical and financial proposals respectively. When zero weightage is given to financial proposals, it will
be termed only quality based selection. In case where any weightage is assigned to financial proposals it is known
as Quality cum Cost Based Selection ( QCBS).]
(23)
Financial Proposal
Option-A: For Quality cum Cost Based Selection
5.3
The financial proposals of the three top-ranking qualifying consulting firms on the
basis of evaluation of technical proposals shall be opened in the presence of the
representatives of these firms, who shall be invited for the occasion and who care to
attend. The Client shall inform the date, time and address for opening of financial
proposals as indicated in the data Sheet. The total cost and major components of each
proposal shall be publicly announced to the attending representatives of the firms.
5.4
The evaluation committee shall determine whether the financial proposals are
complete and without computational errors. The lowest financial proposal (Fm)
among the three shall be given a financial score (Sf) of 100 points. The financial
scores of the proposals shall be computed as follows:
S=100 x Fm
F
(F = amount of specific financial proposal)
5.5
Proposals, in the quality cum cost based selection shall finally be ranked according to
their combined technical (St) and financial (Sf) scores using the weights (T- the
weight given to the technical proposal, P = the weight given to the financial proposal;
and T+P=1) indicated in the Data Sheet:
S = St x T %+S x P%
Option-B: For Quality Based Selection

(when financial proposal is assigned zero percent weightage)
5.6
After evaluation/raking of technical proposals, only the top-ranking, qualifying firm

shall be invited for opening in presence of representatives formally authorized to
negotiate its financial proposal/contract. These negotiations will focus firstly on the
terms of reference and proposed facilities etc. to be provided by the client. After
agreement on these issues, the cost elements will be discussed and finalized.
In case of failure of these negotiations with the top ranked firm, the second ranked
qualifying firm on the basis of technical proposals will be invited to open and
negotiate its financial proposal/contract. The process shall continue until negotiations
with a qualifying consulting firm is completed successfully.
6.
NEGOTIATION
6.1
Prior to the expiration of proposal validity, the Client shall notify the successful
Consultant that submitted the highest ranking proposal in writing, by registered letter,
cable telex or facsimile and invite it to negotiate the Contract.
(24)
6.2
Negotiations normally take from two to five days. The aim is to reach agreement on
all points and initial a draft contract by the conclusion of negotiations.
6.3
Negotiations shall commence with a discussion of your technical proposal. The

proposed methodology, work plan, staffing and any suggestions you may have made
to improve the TOR. Agreement shall then be reached on the final TOR, the staffing,
and the bar charts, which shall indicate activities, staff, periods in the field and in the
home office, staff months, logistics and reporting.
6.4
Changes agreed upon shall then be reflected in the financial proposal, using proposed
unit rates (no negotiation of the staff month rates).
6.5
Having selected Consultants on the basis of, among other things, an evaluation of
proposed key professional staff, the Client expects to negotiate a contract on the basis
of the staff named in the proposal. Prior to contract negotiations, the Client shall
require assurances that the staff members will be actually available. The Client shall
not consider substitutions of key staff except in cases of un-expected delays in the
starting date or incapacity of key professional staff for reasons of health.
6.6
The negotiations shall be concluded with a review of the draft form of the contract.
The Client and the Consultants shall finalize the contract to conclude negotiations. If
negotiations fail, the Client shall invite the Consultants that received the second
highest score in ranking to Contract negotiations. The procedure will continue with
the third in case the negotiation process is not successful with the second ranked
consultants.
7.
AWARD OF CONTRACT
7.1
The contract shall be awarded after successful negotiations with the selected
Consultants and approved by the competent authority. Upon successful completion of
negotiations/initialling of the draft contract, the Client shall promptly inform the other
Consultants that their proposals have not been selected.
7.2
The selected Consultant is expected to commence the Assignment on the date and at
the location specified in the Data Sheet.
8.
CONFIRMATION OF RECEIPT
8.1
Please inform the Client by telex/facsimile courier or any other means:

i)
ii)
iii)
that you received the letter of invitation;

whether you will submit a proposal; and
if you plan to submit a proposal, when and how you will transmit it.
(25)

LETTER OF INVITATION (LOI)
DATA SHEET
LOI
Clause #_____________
1.1
The name of the Assignment is : _________________________________

___________________________________________________________
___________________________________________________________
The name of the Client is : _____________________________________
___________________________________________________________
__________________________________________________________
1.2
The description and the objectives of the Assignment are : ______________

_____________________________________________________________
_____________________________________________________________
1.3
Phasing of the Assignment (if any): _______________________________

___________________________________________________________
___________________________________________________________
1.5
Pre-Proposal Conference: Yes _____ No _____

if yes, indicate date, time and venue.
The name(s) and address (es) of the Official (s) is (are): ________________
___________________________________________________________
___________________________________________________________
1.6
The Client shall provide the following inputs: ______________________

___________________________________________________________
___________________________________________________________
1.8
The Invited firms are: _________________________________________
(26)

___________________________________________________________
2.1
The Documents are: {TOR/Background information, Draft Form of Contract,

Sample formats/Appendices etc.}: ______________________________
___________________________________________________________
2.2
The address for seeking clarification is: _________________________

___________________________________________________________
3.3
(i) A short-listed firm may associate with another short-listed firm.

Yes ___ No ____
(ii)
The same sub-consultant may participate in several proposals

Yes ___ No ____
(iii) The estimated number of key professional staff months is: _________
iv)
Proposed key staff shall be permanent employees who are employed with the
consultants at least six months prior to submission of Proposal.
Yes ___ No ____

(v)
The minimum required experience of proposed Key staff is [ Position;

minimum academic qualification, special training etc., number of years of
professional experience, number of years/minimum number of similar projects
for specific expertise]:
3.4 (vi)
Training is an important feature of this Assignment:.
Yes ___ No ____

(vi) Additional information in the technical proposal includes: ______
_____________________________________________________
3.7
Professional
liability,
insurances
(description
or
reference
to
documentation): _____________________________________________
(27)
appropriate

___________________________________________________________
4.1
The number of copies of the Proposal required is: One original and (number) copies.
4.2
The address for writing on the proposal is : __________________________

_____________________________________________________________
Telephone:____________________________________________________
Cable: _______________________________________________________
Telex: _______________________________________________________
Facsimile: ____________________________________________________
4.3
The date and time of proposal submission are: _____________________
4.4
Validity period of the proposal is (days, date): _______________________

The location for submission of proposals is: _______________________
___________________________________________________________
5.2
The points given to each category of evaluation criteria are:

Description/Items
i)
Points *
Specific experience of the consultants

related to the Assignment
ii)
Adequacy of the proposed Work Plan and
Methodology in responding to the TOR
iii)
Qualification and competence of the Key
Staff for the Assignment
(iv)
Suitability for the transfer of knowledge
Programme (training)
Total Points:
[5-10]
[10-30]
[30-60]
[0-5]
100
The points earmarked for evaluation sub-criteria for suitability of Key staff are:Points**
(i)
Academic and General qualifications
(28)
[20-30]
(ii)
Professional experience related to the Project
[50-60]
(iii)
Knowledge of language(s)
[5-10]
(iv)
Status with the firm (Permanent & duration with Firm)
[0-5]
Total Points:
100
- The minimum qualifying technical score [Number] Points.

5.3
The date, time and address of the financial proposal opening are:______________________________________________________________
______________________________________________________________
5.5
The weights given to the Technical and Financial Proposals are:Technical:

Financial :
7.2
(Between 0.8 and 1.0)

(Between 0.0 and 0.2)
The Assignment is expected to commence on:Date: ________________________________

Location: _____________________________
______________________________
Sincerely,
[Name of Client]
Enclosures
-
Terms of Reference/background Information

Sample Forms for:- Technical Proposal
- Financial Proposal
Draft Form of Contract
_______________________________________________________________
*
Evaluation Criteria
The points recommended to be earmarked for each of the four heads under para 5.2, as may be
noted varies between two limits. The LOI to be issued will, however contain only one figure out of
a total of one hundred. These limits are to be fixed by the LOI/Invitation Documents Finalization
Committee which shall vary for various kinds of consultants assignments.
For the sake of citing an example five types of assignments are listed as follows:
(29)

Total Points= 100
Type of
Assignment
1.
Pre-investment
2.
Preparation
Design,
Tender Documents, Prequalification, Tendering
Award
Specific
Experience of
the Firm
Work Plan/
Methodology
Competence
of KeyPersonnel
Suitability for
Training (when
Training is part of
Assignment)
10
30
55
35
30
30
20
70
3.
Supervision
Construction etc.
of
4.
Training
10
10
80
All Four Phases Listed

above part of Assignment
10
25
60
The different values for the four items reflect varying degrees of importance that the Firms experience and
the proposed personnel have for assignment where, say the Firms accumulated experience counts (as in
civil engineering design), as opposed to, say, training, where success will depend principally on the actual
Trainers. Experience of the Firm is normally assigned less weightage than the other two categories,
because the Client has already taken into consideration this aspect at the time of selection for prequalification/short listing of the Firms for issuance of Requests for Proposals
**
Evaluation Criteria of Key Staff

In the case of evaluation of suitability of the proposed staff, the recommended points mention ranges and
the RFP committee has to fix specific number of points for each expert according to the requirements of
the experts assignment. This aspect will be discussed in further detail under the section Evaluation of
Proposals.
(30)
STANDARD FORMS
(31)
APPENDIX-I
TECHNICAL PROPOSAL FORMS
(32)
Form 1
FIRMS REFERENCE
Relevant Services Carried Out in the Last Ten Years
Which Best Illustrate Qualifications
Using in the format below, provide information on each reference assignment for which your
firm, either individually as a corporate entity or as one of the major companies within a
consortium, was largely contracted.
Assignment Name:
Country:
Location within Country:
Professional Staff Provided by

Your Firm:
Name of Client:
No of Staff:
Address:
No of Staff Months:
Start Date (Month/Year):
Completion
(Month/Year):
Name of Associated
Firm (s), if any:
Date
Approx. Value of Services (in

Current USD/Rs.)
No. of Months of Professional
Staff Provided by Associated
Firm(s)
Name of Senior Staff (Project Director/Co-ordinator, Team Leader) involved and functions
performed:
Narrative Description of Project

Description of Actual Services Provided by Your Staff
Consultants Name: ______________________________
(33)
Form 2
PRESENT STAFF DEPLOYMENT
(As of ________________)
Major Project(s) Presently Undertaken
Project Name Location
Field of Expertise
Total Number of
Permanent Staff
(34)
Associates(s)
Staff Assigned
to Above Projects
Form 3
APPROACH PAPER ON METHODOLOGY PROPOSED
FOR PERFORMING THE ASSIGNMENT
(35)
Form 4
COMMENTS/SUGGESTIONS OF CONSULTANT
On the Terms of Reference (TOR)
1.
2.
3.
4.
5.
6.
Etc.
On the data, services and facilities to be provided by the Client indicated in the TOR:1.
2.
3.
4.
5.
Etc.
(36)

Form 5
FORMAT OF CURRICULUM VITAE (CV) FOR PROPOSED KEY STAFF
1. Proposed Position: ________________________________________________
2. Name of Firm: ___________________________________________________
3. Name of Staff: ___________________________________________________
4. Profession: ______________________________________________________
5. Date of Birth: _____________________________________________________
6. Years with Firm: ___________________________________________________
7. Nationality: ______________________________________________________
8. Membership in Professional Societies: ________________________________
(Membership of PEC is Mandatory)
9. Detailed Tasks Assigned on the Project: ________________________________
_______________________________________________________________
10. Key Qualifications:
[Give an outline of staff members experience and training most pertinent to tasks on
assignment. Describe degree of responsibility held by staff member on relevant previous
assignments and give dates and locations. Use up to one page].
11. Education:
[ Summarize college/university and other specialized education of staff member, giving
names of institutions, dates attended and degrees obtained.]
12. Employment Record:
[ Starting with present position, list in reverse order every employment held. List all
positions held by staff member since graduation, giving dates, names of employing
organizations, title of positions held and location of assignments. For experience in last
ten years, also give types of activities performed and client references, where
appropriate.
13. Languages:[Indicate proficiency in speaking, reading and writing of each language: excellent, good,
fair, or poor].
(37)
14. Certification:
I, the undersigned, certify that to the best of my knowledge and belief, these bio-data
correctly describe myself, my qualifications and my experience.
____________________
Date: ____________
Signature of Staff Member
Day/Month/Year
or:
______________________
Authorized official from the firm
(38)
Form 6
WORK PLAN/ACTIVITY SCHEDULE
Items of Work/Activities
Monthly Programme from date of assignment (in the form of a Bar Chart)
1
10
11
12
13
14
15
Form 7
Completion and Submission of Reports
Reports
Date
1. Inception Report
2. Interim Progress Report(s)
- Monthly
- Quarterly
- Yearly
3. Draft Completion Report
4. Final Completion Report
(39)
Form 8
WORK PLAN AND TIME SCHEDULE FOR KEY PERSONNEL
Months (in the form of a Bar Chart)
Name
Full Time: _________________

Part Time: _________________
Number of Months
Position
2
Activities Duration
10
11
____________
Yours faithfully,
Signature _________________
(Authorized Representative)
Full Name
Designation
Address
(40)
________________
________________
________________
12
13
14
15
Form 9
COMPOSITION OF THE TEAM PERSONNEL AND THE TASKS TO
BE ASSIGNED TO EACH TEAM MEMBER
1. Technical/Managerial Staff
Name
Position
Task Assignment
2. Support Staff
Name
Position
(41)
Task Assignment
APPENDIX-II
FINANCIAL PROPOSAL FORMS
(42)
Form 1
BREAKDOWN OF RATES FOR CONSULTANCY CONTRACT
Project:____________________________________Firm:__________________________________
Name
Position
Basic
Salary
per Cal.
Month
Social
Charges
(%age of
1)
Overhead
(%age of
1+2)
SubTotal
(1+2+3)
(1)
(2)
(3)
(4)
Fee
(%age
of 4)
(5)
Rate per
Month
for
project
Office
(6)
Field
Allow.
(%age of
1)
Rate per
Month
for Field
Work
(7)
(8)
Notes:
Item No. 1 Basic salary shall include actual gross salary before deduction of taxes. Payroll sheet for
each proposed personnel should be submitted at the time of negotiations.
Item No. 2 Social charges shall include Clients contribution to social security, paid vacation,
average sick leave and other standard benefits paid by the company to the employee.
Breakdown of proposed percentage charges should be submitted and supported (see
Form 2).
Item No. 3 Overhead shall include general administration cost, rent, clerical and junior professional
staff and business getting expenses, etc. Breakdown of proposed percentage charges for
overhead should be submitted and supported (see Form 3).
Item No. 5 Fee shall include company profit and share of salary of partners and directors (if not
billed individually for the project) or indicated in overhead costs of the Company.
Item No. 7 Normally payable only in case of field work under hard and arduous conditions.
Full Name:__________________________
Signature:__________________________
Title:______________________________
(43)
Form 2
BREAKDOWN OF SOCIAL CHARGES
S.No.
Detailed Description
As a %age of Basic Salary
(44)
Form 3
BREAKDOWN OF OVERHEAD COSTS
S.No.
Detailed Description
As a %age of Basic Salary

and Social Charges
(45)
Form 4
Page 1 of 2
ESTIMATED LOCAL CURRENCY SALARY COSTS/REMUNERATION

S.No.
I.
Name
Position
Staff-Months
Professional Staff
Sub-Total:
(46)
Monthly Billing
Rate
Total Estimated
Amount (Rs.)
Form 4
Page 2 of 2
ESTIMATED LOCAL CURRENCY SALARY COSTS/REMUNERATION

S.No.
II
Name
Position
Staff-Months
Non-Technical Staff
Sub-Total:
(47)
Monthly Billing
Rate
Total Estimated
Amount (Rs.)
Form 5
Page 1 of 2
DIRECT (NON-SALARY) COSTS
S.No.
Nomenclature
1.
Rent for Office Accommodation
2.
Office Utilities Costs
3.
Cost/rental of Furniture/Furnishings
4.
Cost of Office/Other Equipment
Unit
i) Computers and accessories

ii) Photo copy machines
iii) Communication equipment
iv) Drafting/Engineering equipment
v) Surveying instruments
vi) Cost of Laboratory equipment
vii) Transport Vehicles/Rentals
viii) .......................................
5.
Cost of non-technical support staff not

covered under remuneration charges
6.
Travelling Costs
(48)
Quantity
Unit Price
Total Amount

Page 2 of 2
S.No.
Nomenclature
7.
Communication expenses
8.
Cost for Survey/Investigations
9.
Cost for Model Studies
10.
Cost for O&M of Labs/Testing of Material
11.
Legal/Accounting/Software/Special
Consultants and other similar Costs
12.
Drafting/Reproduction of Reports
13.
Professional liability cost
14.
Office/Drafting Supplies
15.
Similar other costs not covered under other

Heads
Unit
Total:
(49)
Quantity
Unit Price
Total Amount
Form 6
SUMMARY OF COST OF CONSULTANT
S.No.
Description
1.
Salary Cost/Remuneration
2.
Direct (Non-salary) Cost
3.
Contingencies
4.
Grand Total
Amount (Rs.)
(50)
5.0
5.1
EVALUATION OF PROPOSALS
Principles for Selection

5.1.1 The importance of using an equitable and transparent selection procedure that
can stand up to any scrutiny cannot be over emphasized. These principles can
be summarized as follows:
Transparent, clear and unambiguous.

Neutral to all consultants, public or private sector firms.
Appropriate to the assignment.
As detailed in the Letter of Invitation (LOI).
Acceptable to the final approving authority.
In conformity with the relevant provisions in the PEC Bye-Laws.
5.2.2 The most important aim in the evaluation of proposals should always remain
as the selection of the most suitable proposal on the basis of the laid down
criteria to perform and deliver. Of the various factors, the primary emphasis
should be given to the personnel assigned to the work for which proposals
have been invited.
5.2
Evaluation Criteria
5.2.1 Selection of consulting firms require the (short-listed) firms to prepare and
submit technical proposals on a competitive basis as out-lined in the sample
Letter of Invitation provided in the Section-4 of this document. The technical
proposals received have to be evaluated in accordance with the criteria
approved by the approving authority and listed in the LOI.
5.2.2 There are three factors which should be considered for assigning weightage to
the technical proposal and the price quoted by the firms for overall ranking,
which are:
Technical complexity of the assignment.

Impact of the assignment on future implementation process.
Comparability of proposals viz-a-viz the respective output.
The extent to which price is to be considered largely depends upon these

aforelisted three factors i.e. the price factor consideration is inversely
proportional to the complexity, impact and quality of out-put of the
consultants. For simple/type assignments the weightage assigned to price
could be as high as 20 percent and for complex assignments it should not
exceed 10 percent but it could also be fixed as low as zero percent. However it
is upto the clients to judge if weightage for the price factor should be fixed at
zero.
(51)

5.2.3 In the light of the afore-given the respective weightage ranges for Technical
and Financial aspects of the proposals where price is to be taken into
consideration are as follows:a.
b.
c.
Technical
80-100 percent
Financial
0-20 percent
Technical+Financial = 100
5.2.4 It is extremely important that the selection process should never lose sight of
the quality of services which should remain a paramount concern. Therefore
the evaluation criteria is divided into the following categories:a)
Qualification and experience of consultants to cover capacity,
proficiency and specific experience.
b)
Approach and Methodology proposed by the consultants to carry out
the assignment.
c)
Qualifications, experience and quality of proposed Key Staff.
For evaluation of proposals for a particular type of assignment, importance of

each factor is taken into consideration for allocation of a specific weightage to
each factor.
5.3
How to Proceed
5.3.1 As stated earlier, preferably the same committee which was assigned to
formulate and finalize the LOI/TOR/Invitation Documents should be assigned
the mandate to open the Technical proposals at a designated time and also to
carry out the evaluation of the proposals. The chairman/convenor of the
committee should be a reasonably highly placed person in the hierarchy of the
department to command credibility and respect. Alternatively there should be
a Review Committee of not less than THREE and more than FIVE senior
executives who may review the evaluation report prepared by the proposal
evaluation committee individually and hold a meeting within a specified time
period to finalize its recommendations. They may also have the option to ask
the convenor of the evaluation committee to arrange a presentation during this
meeting and offer explanations to any of the Review Committee observations
for finalization of their views to save their precious time. It is re-iterated that
prior to the date of submission of proposals the evaluation/review committees
should already be in place so that they may proceed with evaluation forthwith.
(52)
5.3.2 Detailed Evaluation Criteria

Prior to receipt of proposals and to initiate the formulation of detailed
evaluation criteria, the committee should consider the project, its components,
the project implementation requirements and importance of each factor in the
overall concept. After familiarization with these issues the committee should
proceed with finalization of detailed evaluation criteria and drafting of the
supplementary evaluation sheets on the basis of criteria provided in the LOI
Data Sheet. These sheets should essentially cover the detailed sub-criteria for
qualification/experience of firms, the Approach/Methodology/Work
Programme and for each of the position for the Key personnel whose CVs are
to be evaluated. It may be re-stated that the Key-Personnel are those
permanent staff who are employed with the Consultants for at least six months
prior to submission of proposal and have been nominated in the Data Sheet by
the client and whose Academic/General experience and qualifications have
been specified. It is recommended for sake of neutrality that these sub-criteria
and supplementary evaluation sheets should be finalized before any of the
member goes through the proposals submitted by the short-listed firms.
5.3.3 The committee members should then carefully peruse the Technical Proposals
within a pre-agreed period before a meeting of the evaluation committee is
convened to discuss the following:
Status of proposals received viz-a-viz the short-listed firms.
Status of transmittal of clarifications to all short-listed firms on equal

basis.
Does any technical proposal contain priced financial terms ?
If yes, then decision on its acceptance or rejection.
Reservations/statements expressed in any proposal requiring special

attention.
Responsiveness of the proposals; decision on incomplete proposals.
The evaluation criteria in LOI/sub-criteria, its re-appraisal.
Briefing of the committee members about award of rating and the point
system and distribution of the detailed evaluation sheets.
Committee Members status in respect of the conflict of interest, if any

and decision for the replacement of the member.
5.3.4 The Percentage Rating

It is important that members should agree also about the percentage rating of
various types of entries for the sake of uniformity. A typical sample rating
(53)

guide containing description of the ranges recommended for use are as
follows:Percent Rating
Quality
40-59
60-69
70-79
80-89
90-100
Not acceptable
Marginally acceptable
Good
Very good
Outstanding
5.3.5 The evaluation committee should avoid inconsistencies and bias in applying
the ratings. The members must keep the fact in mind that when price is also a
selection factor it has fixed a cut-off point threshold. Any firm scoring below
that threshold is going to be rejected whose financial envelope shall be
returned un-opened. A threshold of 70 percent is considered appropriate
because setting a higher threshold increases the risk of rejection of all or most
of the proposals. The lowest reasonable rating is accordingly considered as 40
percent. Accordingly, to avoid rejection of a proposal, no rating below this
number should be utilized. This view is recommended because a score lower
than the threshold of one of the criteria may deny the client the option to
negotiate a weak point of otherwise an outstanding proposal.
5.4
Qualification/Experience of Firms
5.4.1 Capacity and specific experience of Consultants is usually sub-divided into the
following sub-factors:
Experience on similar projects

Experience in similar conditions and areas.
Capacity of the consultants to carry out the assignment.
Un-necessary strict conditions such as length of operations of a firm,

weightage to the largest number of projects for 100 percent credit, total value
of contracts over a specified time period for 100 percent credit, un-necessarily
long list of home office support elements of men and material for awarding the
100 percent credit should not be imposed.
5.4.2 No two projects are exactly alike which would always be a hurdle in decision
making for considering the previous experience as similar project experience.
However, the proposal evaluation committees can take into consideration the
experience of each similar/comparable component/or sub-component in the
previous experience of the firm(s) and number of activities performed on the
previous projects after assigning rational weightage to each component of a
project as well as to each activity to be performed by the selected firm.
(54)

Components of a Project
For the sake of example the components of an Irrigation and Drainage Project
can be listed as follows:A.
Irrigation Component
a)
b)
c)
d)
B.
Diversion Structures
Main Canals (Lined/Unlined)
Distribution System (Distys and Minor Canals)
On Farm Water Management
Drainage Component
a)
Surface Drains
i)
ii)
iii)
b)
Main Drains
Secondary/Tertiary Drains
On Farm Drains
Sub-surface Drains
i)
Interceptor Drains
ii)
Horizontal (Tile) Drains
iii)
Vertical Drains (Tubewells)
Activities on a Project
In the same manner the duties of the consultants i.e activities on the
project could include:a)
b)
c)
Survey and Investigations

Design of Project/Project Components/Tender Documents
Procurement:
i)
Pre-qualification of Contractors
ii)
Tendering/Evaluation/Award of Contracts
iii)
Contract Management
d)
e)
f)
g)
h)
i)
Construction Supervision
Quality Control
O&M of Completed Project
Project Monitoring and Benefit Evaluation
Social Surveys/Environmental Impact Assessment
Etc. Etc.
5.4.3 Each of the project component forming part of the project has its own
significance and importance which can be assigned a weightage so that when
any Firms previous experience on a specific project shows experience only
for that specific component, it could be considered for award of proportional
(55)

credit. In this manner no experience of a Firm will go un-noticed/unrewarded
and the Firm will be awarded credit for that previous experience.
Similarly, a Firm on a specific project may only have carried out feasibility
studies with surveys, investigations, feasibility level design, economic studies,
social assessment and Environmental Impact Assessment (EIA) studies, while
it has also carried out on another project the detailed/Tender design and
finalized the Tender documents. On still another project it may have provided
services on procurement, construction drawings and construction supervision
with Quality control duties. Similarly it may have provided services only for
O&M of an irrigation project. In case we have accorded a weightage to each
activity for their significance, then the firm will be able to get credit in a better
and equitable manner than comparing the previous experience with present
requirement on a lump-sum basis which always has the chances of arbitrary
credit assignment by the evaluation committee members, some times with
large variations on the basis of their own perceptions.
For the sake of explanation a Sample Form containing this detailed subcriteria is provided on the pages 57 as Form 5.1.
(56)
(TITLE OF THE PROJECT)

EVALUATION OF TECHNICAL PROPOSALS
I.
Sample Form 5.1
QUALIFICATION/EXPERIENCE OF FIRM: MAXIMUM POINTS 1000

Name of the Firm: ____________________________________________
Weightage
Sr.
No.
Project Components
A.
(a)
Experience on Similar Project of

matching magnitude/ complexity
SPECIFIC
i)
ii)
iii)
iv)
(b)
Diversion Structures
Canal (Lined/Unlined)
Distribution System
OFWM
Sub-Total (a):GENERAL
Experience on Projects which are not
similar but are important to judge
capacity of the Firm (maximum credit
for 3-5 Projects)
B.
C.
Sub-Total (b):Experience
in
similar
conditions/regions
OTHER FACTORS
Home Ofifce Support
a.
Back-up Facilities
b.
Sub-Total (c):Total Points Under-I
Percentage
Points
80 % of 100
80
75% of 80
60
30%
30%
20%
20%
18
18
12
12
60
25% of 80%
20
100%
20
10% of 100
10
10% of 100
50
50
100%
10
5
5
10
A C T I V I T I E
S
Survey/
Investigation/
Planning
10%
Design of
Project
30%
Procurement
24
O&M
20%
Construction
Supervision
30%
16
24
10%
Points

5.5
Approach and Methodology

5.5.1 For evaluation of this aspect of a firms capability, Approach and
Methodology proposed by the firm to carry out the assignment is usually subdivided into several areas which can include the following heads:
a.
b.
c.
d.
Understanding of Objectives
Quality of methodology
(The methodology should cover all phases of the Project, all
components of the project and all activities of the project individually).
Innovativeness:
The consultants have proposed to carry out surveys, design or quality
control etc, adoption of latest concepts for Quality Assurance which
would help produce quality out-put, be economical and employs stateof-the-art technology.
Work Programme
i)
ii)
iii)
iv)
v)
e.
Facilities Proposed for the Assignment

i)
ii)
iii)
iv)
v)
vi)
f.
g.
Activity Schedule(s)
Team Organization
Bar Chart
CPM Schedules
Staff duty Matrix
Staffing Schedule
Estimate of Staff Months
Support Staff
Office accommodation/furnishings
Living accommodation
Equipment
Transport
Any other facilities
Transfer of technology
Conciseness, clarity and completeness in proposal presentation
5.5.2 The afore listed areas under which the quality of proposals can be judged may
be assigned weightages from within the total weightage assigned to this factor
which has been explained under Section-4. The weighting is allotted, again,
according to the relative significance of each area enumerated under para
5.5.1. However, the two most important areas are quality of methodology and
the work programme which would share maximum weightage between
themselves.
As a general guide, a general distribution of weightage for these areas is as
suggested in the Sample Form 5.2 on page 59.
(58)

Sample Form 5.2
Maximum Points: 250*
WEIGHTAGE
ITEM DESCRIPTION
% AGE
POINTS
a.
Understanding of objectives
10% of 250
25
b.
Quality of Methodology
30% of 250
75
i)
ii)
iii)
iv)
v)
vi)
c.
Survey & Investigations

Design
Procurement
O&M
Other Items
Innovativeness
i)
ii)
iii)
iv)
10
25
15
30
10
10
10% of 250
25
30% of 250
75
Survey & Investigations

Design
Implementation Management
Training
Sub-Total (c):
d.
Work Programme
-
Activity Schedule
Team Organization
Staff Duty Matrix
Staffing Schedule
Estimate of Staff Months
35
20
10
25
10
Sub-Total (d):
100
75
e.
Facilities Proposed
10% of 250
25
f.
Transfer of Technology
5% of 250
12.5
g.
Proposal Presentation
5% of 250
12.5
30
30
40
Conciseness
Clarity
Completeness
Sub-Total (g):
Total Approach & Methodology
100
12.5
100%
250
*
The figure of 250 is a multiple of 25 and 10 to make the
figure larger so that points remain in whole numbers and point system
is excluded (as much as possible).
(59)

5.6
Evaluation of Key Staff

5.6.1 In most of the engineering assignments, the professional staff is the key
element for ensuring the quality of out-put. The key staff accordingly is
assigned major share of the points as stated in the Section-4 and consequently
focused upon more closely by the evaluators of the technical proposals.
Evaluation for quality of the Key staff is made on the basis of the following
elements which are also listed in the LOI Data Sheet in Section-4.
-
Academic and General Qualifications

Professional experience related to the assignment
Knowledge of languages
Status with the firm (Permanent Staff Member)
Training experience (if applicable i.e. on job training of client staff)
These sub-criteria should be applied to the team leader and other key
professional staff proposed by the consultants. The weightage to each position
is assigned according to the importance of that experts role in effecting
quality and providing qualitative services. Prior to starting evaluation, the
following major issues must be resolved and agreed upon by the evaluation
committee:
a)
Weightage for Each Group/Expertise

i)
Weightage to Team Leader & Deputy Team Leader (if
required)
ii)
What are the key disciplines
iii)
Weightage for each discipline
iv)
Key personnel in each discipline
v)
Weightage for each key person if more than one expert is to be
evaluated.
b)
Weightage for each qualification element.

i)
Educational
ii)
General qualifications/training.
iii)
Professional experience related to project
iv)
Knowledge of languages
v)
Status with the firm i.e permanent staff member/stable working
relationship with the firm or contracted for the assignment.
vi)
Training experience if on job training is a requirement in the
assignment
5.6.2 Additional essential points to be taken into consideration prior to starting the
evaluation of Key personnel are that the committee is clear about the Key
Person/Groups who are going to have a bearing on the project implementation
and quality of output in addition to the position of the Team Leader. The likely
groups for implementation of an engineering project including services for
O&M, as an example could be:-
(60)

a)
b)
c)
d)
e)
f)
g)
h)
Project Manager/Team Leader

i)
Team Leader
ii)
Deputy Team Leader (if deemed necessary)
Quality Assurance Group
Survey and Investigation Group
Design Group
Procurement Group
Construction Supervision Group
Quality Control Group
O&M Group
Team Leader is normally given large importance because his role is pivotal
and since he effectively contributes towards the success of the assignment.
The weightage to other groups is assigned in the light of their relative
importance within the consultants entire project implementation team. A
sample guide for the evaluators of technical proposals for an engineering
project is provided as follows:Maximum Points: 600
WEIGHTAGE
ITEM DESCRIPTION
5.6.3
% AGE
POINTS
a.
Team Leader
25
150
b.
Quality Assurance
30
c.
Survey/Investigations
30
d.
Design
20
120
e.
Procurement
10
60
f.
20
120
g.
Quality Control
10
60
h.
O&M Group
30
The evaluation committee, after a decision about the weightage to each

discipline/group will consider whether only the top specialist in the group or
how many individuals are to be evaluated which however shall be as given in
the RFP. If more than one person is to be evaluated then weightage to each
individual within the group may also have to be decided before proceeding
with the formulation of the detailed evaluation criteria and drafting of the
supplementary evaluation sheets for each position. The detailed criteria
formulation is a complex exercise and so requires the evaluation committee
members to use their previous experience to decide about weightages for each
element to be considered for evaluation of Key-Personnel listed in the LOI
Data Sheet which are as follows:(61)
Eelements
i)
ii)
iii)
iv)
Percentage Points
Academic and General

Qualifications
Professional experience related
to the Project
Knowledge of Languages
Status with the firm
Total Points
20-30
60-70
0-5
0-5
100
5.6.4
Academic/General Qualifications
5.6.4.1
These refer to formal education, training courses related to the assignment,

training which is considered an asset for successful performance against the
assigned position and other professional attainments like recognition by the
Government or some professional papers printed in local or international
journals. This is taken into consideration to assess the level of advancement
of the individual in his profession. However, it must be remembered that
value of a persons previous university education diminishes with age. For
persons beyond, say about ten years experience more attention should focus
on his career experience, attainments, level of position in the firm and
responsibility assigned to the post. Undue emphasis on university degrees
earned should be discouraged. Infact length of experience and exposure to
appropriate assignments/positions is more significant.
5.6.4.2
The points under this sub-head may be sub-divided in the light of the aforegiven discussion. The minimum engineering degree i.e. a Bachelors degree
should be assigned the threshold percentage and remaining should be
divided into the additional higher qualifications relevant to the position and
other training/attainments in the form of medals/professional papers. For
the position of a design engineer higher degree may be more relevant than
for a construction management engineer where experience of working on a
similar assignment provides exposure and confidence to the expert.
Similarly a management degree may be relevant to a Team Leader as would
be a Law degree to a Procurement (contracts) Specialist. Accordingly the
requirements for any position may not be tailored as to exclude the
engineers with Bachelors degrees because there is no substitute to
experience. However, the higher degree requirement could be demanded
and stated as: An M.Sc. or Ph. D. degree in the related aspect of his
assignment will be considered a weighted qualification and credit may be
awarded for the higher degree accordingly.
(62)
5.6.4.3.
It is desirable that weightage assignable to Academic and General

Qualifications may be fixed as follows:-
Weightage for Academic/

General Qualification
Field of Experts
Team Leader
25 Percent
Design Engineers
30 Percent
Construction Engineers/
Contract Specialists
20 Percent
Planning Specialists/
Quality Control Specialists
5.6.4.4
25 Percent
The total weightage of 20-30 percent assigned to the sub-head Academic

and General Qualifications is then further sub-divided into the elements
which are relevant to the position/assignment which for the Chiefs of
Design, Construction and the Team Leader for an engineering project, as an
example, could be as follows:Percent Weightage
Academic/General
Qualifications
Team
Leader
Head
Design
Head
Construction
B.Sc. Engg. (Related Field)
60-70
60-70
70-80
M.Sc. Engg. (Relevant Field)
10-20
10-20
10-20
Ph.D Engg.
0-5
5-10
MBA/Training in Management
5-10
0-5
0-5
Research/Technical Papers/Recognition
by the Government
5-10
5-10
5-10
Total
for
Qualifications
100
100
100
Academic/General
5.6.5
Experience Related to Assignment
5.6.5.1
This is the most important element and is normally assigned 50-60 percent
of the total weightage for the position/group. This weightage is further
subdivided into the elements relevant to the assignment which could
include:i)
ii)
iii)
iv)
Experience in similar position for a minimum time period as rational.

Experience in the specific project component in Senior Position.
Experience in specific project aspect/component in Junior Positions.
General experience considered useful for the project.
(63)

5.6.5.2
The experience in similar position is normally a requirement for the top

positions i.e. Team Leader, Head Design, Head Construction, Head
Contracts or Head Quality Control Positions to ensure success because the
person has already handled assignments in similar positions and has
successfully led teams of experts/professional engineers. The specified
requirement could be for number of years or number of projects or a
combination of the two which should be a rational and practicable
specification. The weightage assignable to this aspect is a factor of the
importance of the leadership aspect. For the position of a team leader it
could be as high as even 40 percent and for design/construction team
leaders it could be in the range of 10 to 25 percent i.e. it could be higher for
design/construction and lower for contract management and quality control
disciplines.
5.6.5.3
Experience in similar position on a project of similar complexity and

magnitude is an ideal experience which however may always not be
available. The committee should therefore focus on assessment of the
persons exposure to similar project assignments and adequacy of his
experience to carry out the assigned duties successfully. This aspect should
be assigned maximum weightage which could be 40 to 50 percent of the
total weightage assigned to experience related to the assignment.
5.6.5.4
Experience in Junior Positions on a similar project with similar components

is also an important asset because that exposure goes a long way in
providing a real insight into the working and functions of an expert in
performance of his duties in his future life. This experience should also be
considered and adequately weighted which is recommended to be in the
range of 20 to 30 percent of the total weightage assigned to professional
experience.
5.6.5.5
Experience which is not specifically on a similar project as the one under

implementation but is considered generally useful, could also be considered
for awarding some credit/weightage for evaluation of the expert e.g. a
person who designed projects not related to water resources/hydraulic
structures but has worked on design of other types of reinforced
concrete/brick structures may not be overlooked in its entirety and some
credit may be assigned to that under the sub-head the general experience.
Similarly experience on construction of ware-houses, industrial and
residential buildings may not be the same as construction of structures on
an irrigation and drainage system but the construction experience is there
and it may be acknowledged by awarding credit for this as the general
experience.
5.6.5.6
In the light of discussion under the sub-paras heretofore , the weightages

assignable under the Experience Related to Assignment could be
summarized as follows:(64)

Percent Weightage
Description
Team
Leader
Design
Construction
i) Experience in Lead Position
20-40
10-25
10-25
ii) Experience on Similar Projects in

Senior Position
20-40
40-50
40-50
10-20
20-30
20-30
10-20
10-20
20-25
100
100
100
iii)
Experience on
Projects in
Junior Position
Similar
iv) General Useful Experience

Total for
Project
Experience
Related
to
5.6.6 Knowledge of Languages

This element is more valid when some expatriate professionals are also part of
the team nominated by a firm especially when the entire expertise
requirements cannot be mustered from within the local firms or when the
services are procured under some foreign assistance etc. Since medium of
education in Pakistan for higher studies beyond intermediate level is in
English language and Urdu is the National language which is a compulsory
subject for first twelve years of education in Pakistan hence almost all
graduate engineers or allied professionals are generally qualified to secure a
similar ranking on this qualification. This kind of situation does not warrant
that any credit be reserved for proficiency in languages except when for a
certain position there is likely interaction with common people, requiring a
person to know the regional language for first hand exchange of views or
issuing instructions directly to the field staff. Accordingly proficiency in
regional language could be an added asset for the evaluation committee to
earmark 0-5 percent points under this head. This situation is more valid for
professionals related to social/environmental aspects and sometimes
construction supervision duties in the field.
5.6.7 Status with the Firm
The status for this purpose is defined as the experts position viz-a-viz the
firm i.e. is he a permanent employee of the firm. The real intention of this
element is only ensuring the availability of the person if the firm is selected on
the basis of its overall merit. The consultants may be required to provide a
certificate that the key staff will be on the rolls of the Consulting Engineer and
the services of nominated expert will be available upto the end of the validity
period of the consultants proposals.
(65)

5.6.8 In the light of the above discussion, the evaluation committee may consider
various pros and cons of the project and the expertise requirements from the
consultants and finalize a sub-criteria for evaluation of the Key-Personnel for
each and every position. Summary evaluation sheets may accordingly be
drafted for use of the individual committee members. Examples of these
summary sheets are provided as Sample Form 5.3 on pages 67 & 68.
5.7
Evaluation
5.7.1 After discussing the evaluation related issues and finalization of the detailed
criteria for evaluation/drafting of detailed evaluation sheets the committee
members should start their individual evaluation. As a first step each proposal
should be closely reviewed; its relevant and significant features should be
marked and noted for comparison. After this an actual evaluation with
comparison to the other proposals should be carried out for each of the
three/four main criteria by taking into consideration the individual elements of
the sub-criteria. The results should be recorded on the detailed work sheets for
main criteria and sub-criteria as well as for each of the Key staff
selected/earmarked for evaluation by the committee.
5.7.2 It has been experienced that ratings given to criteria fluctuate during the actual
evaluation process. The variations in credit award occur because rating
accorded during the initial evaluation of the first proposal may be either too
low or too high compared with the credit rating accorded to proposals
evaluated later. This happens because the experience/qualifications of
firms/individuals may be considered better than adequate and awarded high
rating. However, when the other proposals are reviewed the evaluator may
find that the qualifications/experience of the previous proposal was only
adequate if compared to the other proposals. This kind of situation would have
to be adjusted to reflect the difference in quality as found in the comparison of
proposals with each other.
5.7.3 In the light of the foregoing, it is essential that when all the main and subevaluation criteria have been rated and the scores have been computed, each
proposal should be re-read in its entirety. Another very practical solution is
that all proposals should be reviewed and marked before exercise for award of
*credit is initiated. The evaluators should then compare the qualifications of
the firms by going through the single element/item in each proposal and
concurrently award the credit rating by placing the data in ones mind to be at
the same plane all the time viz-a-viz all the proposals. Another problem
normally encountered is that some evaluators are consistently generous and
some are consistently harsh in their judgements and awarding ratings. This
disparity would be acceptable provided each evaluator is individually
consistent with all the proposals to arrive at a final rating which is just,
realistic and the final scores still reflect appropriate difference in the quality of
the proposals.
(66)
(TITLE OF THE PROJECT)

EVALUATION OF TECHNICAL PROPOSALS
Maximum Points:
______________________
EVALUATION OF KEY PERSONNEL

Name of the Firm
:_______________________________
Position
:______________________________
Name of Nominated Staff :_______________________________

Maximum
Weightage
Percentage
Sr.
No.
A.
Description
ACADEMIC AND GENERAL
QUALIFICATION
a) B.Sc. Engg. (Specified Discipline)
60-80
M.Sc.Engg. (Specified Specialization)
10-20
c)
Ph.D. Engg
0-10
iv)
Management (Degree/Diploma/Training)
0-10
v)
Professional Papers, Recognition by the

Govt/Professional Institutions
5-10
Sub-Total (A):-
a)
b)
PROFESSIONAL EXPERIENCE
RELATED TO ASSIGNMENT
Experience in Lead Position (specified
Requirement)
Experience as Senior Professional
Points
20 to 30%
b)
B.
Points
100
50-60
10-40
20-30
(i) Irrigation Component

- Diversion Structure
- Main Canal
- OFWM
(67)
Status
Awarded
c)
C.
(ii) Drainage Component

- Surface Drains
- Sub-Surface Drains
- Tubewells
- Tile Drains
- Inceptor Drains
Experience as Junior Professional
(i) Irrigation Component
- Diversion Structure
- Main Canal
- OFWM
- Structures
(ii) Drainage Component
- Surface Drains
- Sub-Surface Drains
- Tubewells
- Tile Drains
- Inceptor Drains
Sub-Total (B):-
20-30
100
KNOWLEDGE OF LANGUAGES
i)
ii)
iii)
D.
Structures
English
Urdu
Regional Language (Sindhi, Balochi, Pushto,
Punjabi)
Sub-Total (C):STATUS WITH THE FIRM
Permanent Employee
Sub-Total (D):Total (A+B+C+D):-
0-5
60%
20%
20%
100
0-5
100%
100
100
Evalu.of tec-2.xls
(68)
(69)

5.7.4 It has also been experienced that the consultants try to hide their deficiencies viz-a
viz the requirements of the Terms of Reference (TOR) by making vague
statements. It should be the policy of the evaluators that vague statements and lack
of clarity in proposals on specific issues relating to the evaluation criteria and the
TOR should be reasons for downgrading the ratings. This is very important
because the consultants were invited to submit proposals clearly defining their
experience; their understanding of the assignment, approach, methodology and
work plan and nominate the staff which is the best suited to carry out the
assignment.
5.7.5 It may be kept in view that approach and methodology proposed by consultants is
not only meaningful but also reflects a clear understanding of the objectives. The
work plan is also a definite Key to judge the understanding of consultants of this
aspect. The Activity Schedule and the staffing schedules should be reconciled and
may be judged for their adequacy and appropriateness for the project. Sometime
consultants provide only simple re-statements of the scope of services and the
TOR, stating that they will carry out these duties which should not be acceptable
because it does not reflect the adequacy of their understanding of the project or
their approach and methodology.
5.7.6 The evaluation of Key staff CVs should demand extra care; the experience of a
permanent employee of firm can be cross-checked with the experience of the firm
to locate any discrepancies. The age of the person, the data about education, the
previous positions held by him and his place in the consultants team should be
critically appreciated for assessment of the person to judge if he acquired the
professional level and experience to carry out the services assigned to him during
the currency of the present project for which services are being procured.
5.7.7 Comments on the TOR normally reflect the consultants level of understanding of
the key issues which often serves as an important guide for grading the consultants
work plan and approach. Any comments or even criticism of the TOR by the
consultants should not be rejected nor it should be noted for their penalization
before it is carefully reviewed. If these are realistic and reflect their maturity to
carry out the assignment it should be noted for awarding credit and later discussion
during contract negotiations. It has actually been experienced that consultants
proposals based on their previous experience and containing adverse remarks on
the TOR were actually helpful in improving the TOR and the implementation
schedules for the project.
5.8
Review by Committee and Selection

5.8.1 After the members of the evaluation committee have completed their individual
evaluations, the convenor should convene the committee meeting. The committee
would then jointly consider the individual evaluations and the scores, discuss the
merits of each view point and choose the best proposal after assigning a technical
ranking to each of the proposals. It is extremely important that all proposals are
(70)

accorded its realistic position in ranking because it not only will help assess the
best techno-financial ranking on the one hand and in case financial negotiations
fail with the top ranked firm one may have to negotiate with the second ranked
firm on the other hand.
5.8.2 The committee may proceed with the review in an organized manner by adoption
of a formal agenda which could include the following items:i)
ii)
Discussion and revision of individual evaluations, if so warranted.

Finalization of technical ranking of proposals on the basis of arithmetic
averages of the scores awarded by each member.
iii)
Finalization of comments on the ranked proposals which crossed the

minimum quality
threshold because it would be clarified during
negotiations.
Elements from all proposals which are considered to be useful for rendering
improvement in the methodology to carry out the assignment.
Finalization of the Evaluation Report for submission to appropriate
forum for its approval before financial proposals are opened.
iv)
v)
5.9
Evaluation of Price and Final Ranking of Proposals

5.9.1 After obtaining clearance of the ranking of Technical Proposals by the competent
authority the financial proposals of the top ranked three firms which crossed the
technical quality threshold should be opened in the presence of the consultants
representatives who care to attend. The financial proposals should be verified and
adjusted to correct any mathematical errors after checking that proposals cover all
the items of expenditure required under the sample/standard forms. Adjustments
shall also be made for cost of any quantifiable non-material deviations or
reservations or for any particular advantages enjoyed by any of the firms.
However, price adjustment provisions that may apply to the contract price during
implementation of the project shall not be taken into account. If there is
requirement of foreign currency component (FCC) by the firm(s) then the FCC
may be converted to the local Pak Rs. by using the selling rate(s) for the
currency(ies) as quoted by the State Bank of Pakistan or other relevant source such
as inter bank rates for similar transactions on the date of opening of the financial
proposals. After adjustment of prices, scores are computed using the following
formula:Lp/P x 100
Where
Lp
P
is the lowest price from among all the proposals received.

is the price of proposal whose price score is to be computed.
However, the cost element for the sub-contracted services required for the
assignment such as surveys, drilling etc. for geo-technical investigations should not
be included in the price. These costs should be negotiated separately.
(71)
5.9.2 The recommended evaluation procedure for arriving at a joint score is given as an
example for the first three firms having technical ranking and the costs proposed
by them as given in the following table.
Consultants Technical Score
A
B
C
Price (Pak Rs, millions)
87
83
80
5.8
5.2
4.2
The final ranking of these firms for a varying price weightage of 80,85 and 90
percent for technical quality and 20,15 and 10 percent for financial cost shall be as
given in the following Sample Form 5.4.
(72)
Sample Form 5.4
EVALUATION OF PROPOSALS WITH VARYING TECHNICAL PRICE RATIOS

Technical
Consultants
A
B
C
Score
80%
85%
90%
87
83
80
69.6
66.4
64.0
74.0
70.6
68.0
78.3
74.7
72.0
Price
Pak Rs.
in
Million
6.2
4.5
4.2
LPx100
P
Score
67.7
93.3
100.0
20%
15%
10%
13.5
18.7
20.0
10.2
14.0
15.0
6.8
9.3
10.0
Weightage
80/20
83.1
85.1*
84.0
* = Winning
Proposal
X= Weightage
It may be noted from the above example that where price difference is not excessive, a high technical price ratio ensures that the best
technical proposal will become a winning proposal. However, with low technical price ratio the 2nd ranked technical proposal
becomes
the winning proposal. It is desirable that on technically complex projects technical price ratio should be kept rather high.
Evlu.of
tech.3.xls
(73)
85/15
84.2
84.6*
83.0
90/10
85.1*
84.0
82.0
6.0
6.1
NEGOTIATION OF CONSULTANTS CONTRACT
Introduction
Pakistan Engineering Councils relevant Bye-Laws have laid down the basis for
computation of professional charges and modes of payment of professional fees for
consulting services rendered by the engineering firms. A summary of these basis for
computing the cost of services and payment to consultants include the following:6.1.1 Per Diem: Recommended for individual consultants whose services are utilized on
an intermittent basis. Payment to the consultants is made for time actually devoted
to work (including travel time) and all the direct costs actually incurred. The
procedure for computing the rates is based on the monthly salary payable divided
by agreed number of workdays per month.
6.1.2 Retainer: Employment on as and when required basis with token periodic
payment for assuring availability because services are not required on full time
basis. Services of Consulting Engineer are used on short and limited assignments
and payment is made either on fixed monthly sum or on other mutually agreed
basis i.e Per Diem or Hourly rates (in addition to the retainer token amount) for the
time required to perform the services. This system normally is helpful in
eliminating delays in short-listing/selection of consultants.
6.1.3 Cost Plus Fixed Fee: The payment is made as reimbursement of all salary/nonsalary costs plus a fixed fee on projects where exact scope of work is not
appropriately defined at the time of appointment of consultants. In this situation the
consultant is paid a fixed fee defined by PEC as interest on invested capital,
readiness to serve and profit (prior to taxes). The PECs adoption of this mode of
calculation of consultants remuneration and having a contract on this basis carries
certain draw backs. This mode shall be discussed later in further detail.
6.1.4 Hourly Rates: This mode of payment or the rates so computed are applicable even
for Per Diem, Retainer or Cost Plus Fixed Fee Contracts when services are utilized
for less than one month/part of a day. In this situation the rate, the PEC
recommends, should be determined by dividing the monthly salary of the expert by
agreed number of working hours per month and enhancing this rate by an agreed
multiplier to account for the overheads and the fee. The direct non-salary costs are
however, reimbursed as per actuals.
6.1.5 Fixed Man-Month Rates or Fixed Hourly Rates: Only a variation of cost plus
fixed fee where all elements of the billing rate i.e salary, overheads and fee are
fixed which are merged into a fixed person-month or person- hour rates. Direct
non-salary costs are however, still payable as per actuals.
(74)

6.1.6 Fixed Lump-sum Payment: Lump-sum payments are agreed for consultants
services where scope of work is fairly estimated and well defined. However, the
costs are still estimated on the basis of person-month costs and direct non-salary
costs. PEC has finalized a Standard Form of contract based on this mode of
compensation to the consultants. Accordingly this type of contract shall be
discussed in further detail later.
6.1.7 Percentage of Construction Cost: This method is applicable to both; the Design
Phase and the Construction Supervision Phase. The cost of services includes the
man-month costs as well as the non-salary costs chargeable as a fixed percentage
of the construction cost. This method is suitable when exact size and scope of
services for the engineering phase is not fully established at the time of
engagement. For construction phase a fixed fee as percentage of cost is agreed with
clearly defined limitations in respect of duration of contract, man-month
requirements and categories of supervisory staff. The construction cost for such
contracts deems to include cost of project on prevailing market rates at the end of
the design phase. The total construction cost which is used for computing the cost
of services shall not include clients admn. costs, consultants services costs,
interest during construction and cost of land/way leaves.
In this type of contract the disadvantage lies in lack of incentive for the consultants
to make any special effort for the project. The consultant is actually rewarded
rather than penalized if the actual construction cost increases. If a ceiling is placed
on the cost of services this type is automatically converted to a lump-sum type of
contract. This is the type of contract which should preferably be avoided.
6.1.8 Time Over Runs: This is a situation when the project implementation gets
delayed and the consultants were being paid on the basis of fixed percentage of
construction cost. The consultants are compensated under an agreed provision in
the contract for services beyond the specified contract period using the same basis
to compute compensation as used for initial fixation of the percentage costs etc.
6.1.9 Repetitive Structures: This is a situation when design/drawings/cost estimation
and Tender Documents of one set is exactly applicable to similar later units of a
project (not repetition of elements within the same structure). The cost of services
for such assignments is appropriately reduced because the quantum of services
shall remain identical as for the first unit. However, cost of supervision of
construction and related services will not get reduced because there will be no
reduction in quantum of input by the consultants for this phase of the assignment.
6.2
Standard Forms For Consultants Contract

The PEC has however, prepared only two main types of contracts for which standard
forms have been finalized. A third standard form is also available but it is only for smaller
projects. The three standard forms are:-
(75)

a)
Standard Form of Contract for Engineering Consulting Services

Projects) - Time-Based Assignments.
b)
Standard Form of Contract for Engineering Consulting Services (For Large

Projects) - Lump-Sum Assignments.
Standard Form of Contract for Engineering Consultancy Services (For Smaller
Projects).
c)
6.3
(For Large
Time Based /Cost Plus (Fixed Fee) Contracts

6.3.1 This type of contract is usually adopted for projects involving design and
construction of industrial plant and provides for the consultants to be paid a fee,
usually covering know-how, plus time based rates for design and management of
construction of the plant. It may also include a guarantee that the plant will
perform according to the agreed specifications. This type of contract is also used
for Research and Development Work where the degree of input cannot be
estimated nor the output predicted and specified with any degree of confidence.
Inspite of establishing a ceiling in cost of services or even placing an incentive in
the fee structures the client is the one who bears the cost risk.
6.3.2 Fixed Fee is defined as interest on invested capital, readiness to serve and the
element of profit. It is further stated that this fixed payment varies with the scope
of consulting engineering services involved and may vary with factors like:-
Project size and its construction cost;

Complexity of work;
Risks involved in cost ceiling imposition;
Uncertainty of scope of the project;
Difficulty in re-defining scope of the project/cost ceilings; and
Other factors which are not a function of size of the project, and include:-
Duration of services performed;

Number of persons employed; and
Their composition.
All the factors enumerated above are likely to form the basis of negotiation of
Fixed Fee with the client.
6.3.3 This type of contract however, is not in vogue in procurement of services for most
of the engineering projects where Time-Based Contracts are usually adopted. In
this type of contract composite rates are agreed per person-hour, per person-day,
per person-week or per person-month which are payable in accordance with the
time the consultants actually spend on the assignment. The components of the
person-month rate are salary (including social charges) costs, a percentage of
salary costs as overhead costs and a percentage of the total of salary plus overhead
costs as Fee; all summed together the billing rate per person month. The other rates
are calculated from this by dividing this rate by the agreed number of hours set to
(76)

be worked in a month, agreed number of days set to be worked in a month or
agreed number of weeks set to be worked in an year. All other costs are payable as
direct/out of pocket expenses and payable as per actuals. This type of contract has
major advantage for the client that he pays only the actual costs incurred by the
consultants to address the assigned tasks.
The clients adopting this type of contract or even fixed fee contracts must be
cautious that sometimes excessive or too little services may be provided than what
is warranted. These person-months must be realistic and both the client as well as
the consultants must carefully monitor the utilization of person-months in
comparison with the progress achieved towards completion of the assignment. The
other point is that this type of contract provides for payment to consultants for their
inputs rather than their out-put, which warrants that monitoring must be made for
input-output schedules. The experience has shown that client generally did not
look into this aspect and so was not aware of who should be on the job and what or
when individuals task would be starting or completing. Accordingly it is
warranted that some key mile stones should be fixed for consultants performances
where ever feasible and possible. Additionally the fielding of the consultants key
and other experts should be allowed according to the actual progress on project
implementation rather than the initial schedules.
6.4
Lump-sum Fee Contracts

6.4.1 For lump-sum contracts the client and consultant negotiate and agree upon a fixed
price for a specified output where the consultants assignment can be pretty well
defined and quantified . This type of contract is simple to administer because
payments are made for output rather than input. Payments are agreed to be released
at either the stated intervals or as specified completion stages of the assignment
and submittals. These contracts also are however, based on a person-month type of
computations to arrive at the total price of the consultants services. Accordingly
its negotiation is usually almost a replica of the Time Based Cost plus Fee
contracts.
Sometimes the prices are also computed on the basis of traditional percentage
formula which has to be fixed by some Engineering institutions. Leading Lending
Agencies and some other international institutions have fixed percentages on the
basis of cost of the project and sometimes adopted by some clients oblivious of the
fact that while project costs in USA could be lower due to cheaper materials than
in Pakistan for projects with similar specifications but the services cost would be
higher due to substantially higher person-month rates in USA. The World Bank
percentages are copied here only for the sake of comparison of cost ratios for
various stages of project implementation. These relationship between the cost of
engineering assignments and total project costs are as follows:-
(77)

Assignment
Sector
Cost as Percentage of
Estimated Project Cost
Infrastructure -
Feasibility Study
- Detailed Design
- Supervision of Construction
Works
0.5-2
3-6
5-8
Architecture
Architectural Design
Contract Administration
2-3
1-2
Industry
Feasibility Study
Outline Design
Detailed Design, Procurement
And Supervision
1-2
1-3
8-12
Procurement Services
1-5 (of cost of goods)
Procurement
Services
6.4.2 It is reiterated that these indicators are copied here only for informal reference.
International practice recommends that these percentages should only be used to
estimate the order of magnitude for preliminary costs of consultants services for
general budgeting purposes. These should not be adopted in a vaccum but with
great caution i.e. either in conjunction with the per-month time-based calculations
or having more of an insight into the cost elements ratios during and for different
stages of project assignments. It must be remembered that actual cost of services
greatly depends on the size and complexity of the design of the project and its
components.
6.4.3 For the client there is an attraction for this type of contract i.e he has transferred the
price risk and any risk of additional work actually required as compared to that
anticipated at the time of negotiation of contract to the consultants. However, that
is a double edged weapon because on the very outset the consultant would like to
provide some kind of cushion or contingency in his price to meet such an
eventuality making the cost figures higher than realistic. The other serious
disadvantage is that consultants will try to complete the assignment with as little
inputs as possible and with staff which is as less costly as possibly feasible. If these
aspects are not to be monitored then even quality could be the first casualty in this
type of contract. If a lump-sum contract is adopted for a period exceeding one year
an allowance for price escalation and additional services required by the client
should be included under the head contingencies in the total price of the lump-sum
contract.
6.5
Preparing for Negotiations

6.5.1 After approval of the ranking of the firms the client should issue an invitation in
writing to the top-ranked firm. This invitation should preferably include, inter-alia,
the following:(78)

i)
The list of any additional information required from the consultants which
they should bring to negotiation meeting.
ii)
Mention any weakness of the consultants proposal especially about key

staff who did not obtain the minimum threshold scores and their
replacement is required.
iii)
Points about their comments on TOR and any reservations about the
consultants proposed work plan etc.
iv)
Any intentions for discussion and rendering any changes in the information
provided in the LOI/Invitation Documents.
v)
Most important, a written formal authorization for negotiation of contract

by their representative(s).
6.5.2 When the price has been considered for ranking of consultants proposals, in
principle the cost of services should not be negotiated i.e. the consultants should
not be asked to reduce the cost except for adjustments where consultants submittals
do not conform with each other such as Activity-Staffing Schedules or percentages
of Overheads. However, it is presently a common practice in many provincial
departments to force the top-ranked firm to provide services at the lowest price
quoted by any of the proposing firms which is a highly misplaced action. This is
un-ethical and very un-fair because the element of price can not be considered in
seclusion of the contents of the technical proposals and quality. Similarly to ask the
consultants submitting a lower cost proposal to perform services as submitted in a
superior technical proposal while maintaining the low cost is also unethical and
unfair. It must be remembered that enforcing unrealistic costs endangers the
quality of services which is a major loss of the client and should never be enforced.
The OBJECTIVE OF NEGOTIATIONS is to arrive at a mutually advantageous,
clearly defined contractual relationship. There is a clear difference in haggling and
negotiations; the first i.e. haggling is the adversary approach where reduction at
any cost i.e. quality and outcome of assignment is enforced by the clients and the
second i.e. later negotiation means distribution of benefits. It is strongly
recommended that the negotiation committees should adopt and maintain realistic
approach and try to attain the best quality possible at realistic and equitable costs.
6.5.3 The client in the meantime should appoint a negotiation committee which should
also contain some of the evaluation committee members. The chairman of the
committee must have sufficient authority to decide about issues that may occur so
as to take negotiations to a satisfactory conclusion as early as possible. Since the
negotiations cover three basic components which include technical services,
financial terms and legal contract, hence the committee should be appropriately
represented upon by experts with requisite expertise in all the three disciplines.
The negotiation committee members should be well prepared who should be
(79)

intimately familiar with the LOI, the appendices of the LOI and the contents of the
winning proposal(s). The committee should decide about the type of financial
information it would seek from the consultants. It should also have information
about the top ranked firms latest prevailing unit person-month rates for the
categories of staff nominated for the project as well as the rates of the elements
forming part of the billing rates. In addition to the foregoing the committee
members should be provided with relevant information compiled earlier as stated
under the sub-paras 5.8.2 (iii) and (iv).
6.5.4 Agenda for Negotiation
The negotiation committee should also finalize an agenda for an organized
discussion in a specific sequence and order which is extremely important. The
sample agenda items include:i)
Opening Remarks
A brief welcome to consultants team by the leader/chairman of clients
team and introduction of his team members. The consultants authorised
Team Leader to respond. The consultants may also try to bring the
Assignment Team Leader to the negotiations, if possible.
ii)
Submission of Formal Authorizations

Consultants representative(s) to present the authority to negotiate and
conclude a contract.
iii)
Terms of Reference
Review and discuss the objective and scope of the assignment, reconcile
any differences between the consultants understanding of proposed
modifications and position of the client. Since this finally agreed TOR shall
form part of the final contract, it should be agreed and finalized with due
care.
iv)
The Methodology, Work Plan and Activity/Staffing Schedules

It shall include:-
Phasing of inputs.
personnel to be assigned and matching of the Activity-Staffing
schedules with each other.
Discussion of new ideas developed on the basis of ideas from
various competing proposals.
(80)

v)
Consultants Personnel
-
vi)
Availability of staff (especially if the validity period of the

proposals has expired)
Quality of staff (if some staff is below the required level of
proficiency).
Counterpart Staff and Facilities

The extent and timing of requirements and provisions of these elements. A
mechanism may be agreed to resolve a situation when any difference
between consultants requirements and clients ability to provide happens
during the currency of consultants contract.
vii)
Equipment
What and how many are to be provided and how to be arranged i.e by the
consultants or by the client.
viii)
The Conditions of Contract

Discussion of all conditions which can have impact on the price of the
assignment to ensure that both parties are on the same grid and appreciate
the implications of these conditions. Modification to special conditions
should be agreed if deemed necessary. The salient aspects which should be
jointly reviewed include, but are not limited to the following:a)
b)
c)
d)
e)
f)
g)
h)
ix)
Services Definition.
Staffing.
Payment Procedures including Advance Payment or revolving Fund
Arrangement.
Bank Guarantees for Advance Payments.
Retention Monies.
Price Adjustment.
Liability Provisions/Insurances.
Disputes Resolution.
Financial Terms
It is extremely important that financial terms should not be discussed prior
to discussing and reaching agreement on the agenda items. Negotiation or
more appropriately, the rationalization of monthly rates is admissible only
when exorbitantly high rates have been proposed. However in case of
QCBS System Salaries of Staff, since it has already been given weightage
in the ranking process, will not be negotiated any further.
(81)

x)
Draft Agreed Minutes and signing of the MOU/Draft Contract.
6.5.5 Billing Rates

The rates for members of the team of experts/other staff proposed by the
consultants can be jointly reviewed so as to ascertain that:
i)
ii)
iii)
iv)
v)
vi)
vii)
The salary items conform to the elements as defined in PEC Bye-Laws.

The rates are based on actually paid salaries of the particular staff member
over past one year. However limited/genuine raise in his salary if awarded
by the consultants in line with the company rules is admissible.
The salary increases are in line with the company rules.
The overhead percentages used for computing the billing rates have been
certified by an independent firm of auditors. Elements of overheads
conform to the elements defined in the PEC Bye-Laws.
The overhead percentage figure is either for the latest year for which Audit
Report is available or an average of the figures as computed for the past 3
years.
There is no double counting of any elements i.e. some items are part of
salary costs and also of overhead costs or the non-salary costs.
The Fee expressed as a percentage of sum of salary cost and overheads is
within acceptable limits which should usually range between 10 to 20
percent (depending on the risks perceived by the consultants).
6.5.6 Payment Provisions

6.5.6.1
Payment provisions are different for Time Based/Cost Plus Fee Type of
Contracts and the Lump-Sum Contracts. However, these provisions
should be agreed and procedures streamlined so as to ensure a steady
cash flow to the consultants. In case of the Time-Based Contracts the
salary related cost should be based on billing rates for consultants time
actually worked for the Project as well as direct/non-salary costs should
be agreed to be payable against monthly invoices as long as the services
are rendered according to the agreed activity schedule. Alternatively the
consultants could be paid on the basis of payment schedules drafted viza-viz the consultants scheduled inputs with adjustments every three
months to ensure regular cash flow to the consultants. Another mode of
payment is placing a revolving fund to cover about 3 months costs in
the consultants account to be re-furbished after two months to make
payments for agreed items/heads and rates. The profit on this fund is
payable to the client. An interest free advance may normally be paid to
the consultants which may later be deducted from the agreed number of
monthly payments during the contract period. However advances are
payable strictly against bank guarantees to be furnished to the client by
the consultants.
(82)

Physical and price contingencies are estimates, and expenditure out of
these should be governed by certain basic conditions which may
include:
i)
Prior approval of the client.
ii)
iii)
An order for extra work signed and formally issued by the client.
Documentary proof that goods or services have gone costlier in
price and agreement is sought before proceeding.
Exchange rate variations incase the expenditure is also agreed to
be incurred in foreign exchange.
iv)
6.5.6.2
Payment schedules for Lump-Sum contracts are made either on the

basis of time periods associated with completion of the assignment or
on the basis of out-put of the consultants. The following two examples
are given for reference:
-
Example A
Contract Signature (Advance)
Assignment 25% complete
(Progress Report 1)
(Progress Report 2)
(Progress Report 3)
Presentation of Report
Final Payment
(After Acceptance of Report)
TOTAL:
15
15
15
30
10
100
Example B
-
Payment Percentage
15
Payment Percentage
Contract signature (Advance)

Draft Inception Report
Final Inception Report
Draft Final Report
Final Report
20
30
10
30
10
TOTAL:
100
6.5.7 Some Points about Negotiation

Negotiation of the consultants contract and finalization of the financial terms is a
serious issue which requires similar attitude and effort. Some advisory suggestions
are made to bring this stage to a meaningful and logical/fruitful end which could
include:(83)
i)
The atmosphere during the negotiation must remain calm and attitudes of the
negotiators professional.
ii) Mutual respect must remain the corner-stone of the basic negotiation policy.
iii) In the event of any team member getting excited, it should be tactfully ignored
because any similar response can hinder the productivity of the negotiation meeting.
iv) Personal references must be avoided; the focus should continue to remain on the
policy issues and aspects.
v) Any modifications proposed by any party should be appropriately and adequately
explained for its review, proper appreciation, discussion and adoption for benefit of
the project.
vi) When negotiators are unable to resolve some dead locks it would be better to pass on
to the subsequent issue and give time to the parties for further consideration and
discussion later/the next day.
vii) As explained earlier, discussion and agreements about finalization of the technical,
material, facilities and personnel issues is likely to create dead-locks. It is very
necessary that the proposed agenda must be followed to resolve such issues in their
order of sequence as listed under sub-para 6.5.4.
viii) The negotiation teams should always remain flexible for arriving at a mutually
beneficial contractual arrangement. The clients adherence to fixed standards or
official billing rates is only going to affect the quality of the services.
ix) The consultants should try to provide the client with adequate information and
explanations about cost structures including actual salaries paid to the staff.
x) The client should not try to impose additional work load upon the consultants which
was not part of the LOI issued to the consultants without due consideration of its
additional cost or try to add to the services after completion of the negotiations.
xi) The Final word of advice; One of the clients nominated representative should
carefully record the minutes with specific reference to the agreements by the parties.
All the recorded agreed points should be initialed by the negotiation team leaders at
the end of the session/day. Similarly the final agreements by the parties should be
initialed in the form of an MOU/Draft Contract which is subject to clearance,
ratification by the competent authorities. It is advisable that in-formal approvals are
obtained from the competent authority before signing of the MOU/Draft contracts.
(84)

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Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

August 31, 2006

PAKISTAN ENGINEERING COUNCIL

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Engr. M. Mazhar-ul Islam

Engr Shehryar Khan

Engr M Shahid Rafiq

Engr Sohail Ahmad Khawaja

Engr Mahmood Ahmad Sulehri

Engr Arif Kasam

Engr Ayaz Mirza

Engr. Shamshair Dad Khan

Engr. Ejaz A . Khan

Engr Tafseer Ahmad Khan

Engr Mushtaq Mahmood

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

DEFINING SCOPE OF SERVICES AND DRAFTING

Outline of the TOR ............................................................................... 4

ESTIMATE OF CONSULTANTS INPUT AND COST .......................................... 8

LETTER OF INVITATION - INVITATION DOCUMENTATION ................... 18

Letter of Invitation ........................................................................................... 18

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

LOI DATA SHEET.................................................................................................... 26

EVALUATION OF PROPOSALS ........................................................................... 51

Principles for Selection ................................................................................... 51

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

NEGOTIATION OF CONSULTANTS CONTRACT.......................................... 73

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Defining Scope of Consultants Services and Drafting the Terms of

Scope of the Document

Factors For Evaluation

The consultants competence and experience relevant to the assignment;

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Quality of approach and methodology to include understanding of project needs,

Qualifications and experience of the proposed personnel.

Limitations During Negotiations

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

DEFINING SCOPE OF SERVICES AND DRAFTING THE

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Forging an agreement between all partners in project implementation on the

2.2.4 OUTLINE OF THE TOR.

This section should concisely describe the general background of the

Why this assignment?

Determination of Project Feasibility.

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Tasks to be carried out.

Collection of previous data/documentation.

Data and documentation already available with the client.

Team responsibilities requirements.

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Association/Joint Venture arrangements issues coverage.

TRAINING AND SKILLS TRANSFER

The institutional set-up/Project Management Organization.

Periodic Progress Reports: These should include but may not be

Inception Report: The consultants may be required to submit these

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

Interim Reports: In case of a phased assignment, the consultants shall

Final Report:The consultants are normally asked to provide a draft

The consultants financial proposal is a function of client provided facilities

Standard Procedure for Evaluation of Proposals for Procurement of Engineering Services

ESTIMATE OF CONSULTANTS INPUT AND COST